Academic Journal of Research in Business & Accounting www.newscienceseries.com Vol. 2, No. 9, September 2014, 11-22
ISSN: 2311-326X
Basic Elements, Tools and Control Techniques of Just-in-Time System Amir Reza Ramezani 1*and Ali P. Razmeh 2
Abstract
Abstract
he philosophy of just-in-time system is based on elimination of waste inventories and non-value-added activities in manufacturing operations and based on continuous improvement. In fact, just-in-time system is a manufacturing philosophy with a simple objective of producing required items, with required quality, in required amount and exactly at required time and in order to overcome problems of traditional systems and mass production and to achieve desired objectives, it uses simple and effective tools and principles and critical elements. Using pull system instead of pushing system, kanban manufacturing system, continuous improvement and minor innovations not revolutionary, total quality control, cellular manufacturing, autonomation, andon, etc, beside use of supply chain management along good housekeeping, coordination of tasks, Training multi-skilled staff, Inventory management system, small production categories, Strive for customer satisfaction, reduce lead time, Reducing manufacturing and delivery latency, Flexibility in production, also focus on simplification and standardization of work, Infallibility, Production Smoothing, Special focus on collaboration and employee involvement and preventive maintenance have made just-in-time system into a desired system for companies with a good working culture who seek customer satisfaction and environmental protection With minimum cost, waste and use of resources with maximum quality and profitability of in the world with a world of limits. Keywords: Just-in-Time System, Just-in-Time Manufacturing, Supply Chain
1* Corresponding author: Faculty member of Islamic Azad University Miyaneh-Branch,
[email protected] , 2 Faculty member of Islamic Azad University Miyaneh-Branch
Ramezani and Razmeh
Introduction Just-in-time system was created in the Toyota Manufacturing Co. when corporations were faced with a real crisis (Schonberger, 1982). After World War II, Japanese companies faced with the problem of wide shortage of raw material, financial and human resources and Western companies were also grappling with another form of these problems and it was in these circumstances that the concept of manufacturing called JIT was born (Womack, 1990; Cheng & Podolsky, 1996). In order to move toward improvement, early leaders of Toyota such as Toyoda, Kichiro, Shingo and Tayichi Ono established a new system based on discipline and a process-driven system that was called Toyota Production System (TPS) or just-in-time system. Ono was the person who was responsible for development of productivity system in Toyota And in fact was the first person to support this system (Goddard, 1986). Ono took some production ideas of west especially some of the ideas of Henry Ford from the book today and tomorrow and Ford's moving assembly line from Continuous flow of formed materials became the basis of Toyota Production System. After some practice, the Toyota Production System was developed and between 1945 and 1970, it was considered again and which is growing up to now. Infrastructure basis of this system is to minimize utilization of resources that does not produce value-added. However, Toyota has been originator of many management systems to the world. 5S, kaizen, kanban, and lean manufacturing are among these systems (Binesh,2006).
The elements of Jut-in-time manufacturing system The main approach of just-in-time manufacturing system is product cost reduction by waste elimination and with this regard it is an operational system. Operational planning and control system are information systems which are implemented in production environment. Systems are implemented in different ways in different environments. Production environments can be changed to make simpler and more efficient planning development and control system. Just-in-time system is not only a controlling technique, but also the manner and means of improving the production environment. Justin-time system can be efficient in Just-in-time environments. Just-in-time manufacturing system is an approach to facilitate the operation before being operational approach, technique or strategy.
A) Principles of Jut-in-time manufacturing system, Basic elements, tools and control techniques 1- Pull manufacturing system Pull is the fourth principle in lean concept. This principle is useful in the whole of value stream and this means that upstream should not apply to produce until downstream demand any goods or services. This principle enables companies to design, plan and produce goods and services at the request of the customer and what the customer wants while reducing inventory (Womack & Jones, 1996). The principle of pull means that No company produces goods or services in upstream unless the customer demands in downstream. In push system, when the work is completed at each station, product is pushed toward next station or inventory in the case of final product. In this system, the work is pushed to next level in completed form and regardless that the next level or station is ready to receive it or not. In this method, work in process is unbalanced during all labor. Push system is also known as Material Requirements Planning System (MRP). The system provides a long-term schedule based on the planning of sections after which a detailed schedule is made for the construction or purchase of elements. In this detailed schedule, Production line workers are pushed to produce and products are transferred to next stations. The major weakness of this system is relying on guessing. estimate future costuer demand, and prepare schedule based on gueassing required time to produce each unit that more or les estimations lead excess inventory in a section and inventory shortages in other sectors (Shivanand, 2006).While in pull system, each station takes the product of the previous station according to its needs, results of final operations is done based on customer demand or comprehensive planning. So, pull system is carried out in response to the demand of the next process. In pull system, kanban is used for efficient monitoring on pull process.
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2- Kanban manufacturing system Kanban, is a small marker board that has been main control tool for JIT manufacturing and has services such as instructions for production and transport, means for visual control, control of extra production, outside processing speed detection criteria and tools for kaizen. In fact, Kanban is a card attached to the box of parts that transfers signals and marks of requests and demands of pull stream of work from one section to the downstream sector. In other words, is a method to maintain a regular stream of materials, identifying the material order points, the amount of material needed, places that materials ordered and where materials must be delivered. Kanban is visual cues or signals that takes place through transfer of a set of instructions to withdraw or production parts. Generally, kanban is a card which moves between processes and transfers data to figure out what parts need materials and components. In other words, kanban is an information system which is used not only to control the element inventories in productions stream, but it can also be used to control production stream and inventory stream of elements which are purchased in manufactured form from outside of the company (Khatami, 1994).
3- Continuous improvement (kaizen) Kaizen meaning continuous improvement is based on three dimensions. Improving the quality of products and services, zero waste, and customer satisfaction through collaborative management based on staff suggestions in the quality control department are dimensions of continuous improvement (Alborzi, 2002). Kaizen philosophy is based on the belief that human’s family life, employment and society are interrelated and must be improved continuously through required activities. The key for continuous improvement in kaizen is in small innovations and creativities not in great dramatic and revolutionary innovations. Kaizen focuses on small reductions of cost in product life cycle. The focus of this approach is on reducing the target cost and giving power to employees. The purpose of Kaizen is to reduce actual costs below the standards set by Innovation. In kaizen system, goal management determines cost reduction and usually compares it with real results every month. Thus, kaizen is used not only for maintaining standard but also it is used to enhance them. Kaizen, or continuous improvement is short-term planning system and employees are the source of problem solving in this approach. Kaizen approach is used for cost reduction at production level. Kaizen culture and its interaction between various social layers and organizations in Japan has caused to change company to university, and university to company; workers learn from manager and manager uses workers’ ideas. The Kaizen philosophy pays special attention to customer satisfaction and it is assumed that all activities and improvements must lead to customer satisfaction and in order to achieve these objectives, three approaches of quality control, quality improvement and quality assurance are used that is known as Juran triangle. Kaizen emphasizes on gradual changes in the process and it is cheaper compared to other methods. But in general, it leads to dramatic changes (Pouyamehr, 2008). Continuous improvement and just-in-time system improve manufacturing system gradually and not intensely. Continuous improvement approach is described as PDCA cycle (Plan, Do, Check and Act) or as PDSA cyce (Plan, Do, Study and Act). PDCA cycle include the use of various statistical tools and endless activities for companies who have accepted the methodology of continuous improvement. Some statistical tools used in this cycle involve Pareto, Cause and effect diagram (Ishikawa fish bone), Histogram, Charts, Control charts, and related techniques (Badiru, 1993).
4- Total and comprehensive quality control (TQC) Total or comprehensive quality control is usually called as total quality management and is management tool for overall performance improvement. Total quality control means kaizen organized activities which include company, managers, and workers in a whole system and integrated attempts toward performance improvement in all levels. This system causes increased customer satisfaction and makes satisfaction through objectives like cost quality, planning, development and improvement of new products. TQC in Kaizen is a movement that helps to improve performance at all levels of management. According to Japanese production standards, effective application of quality control requires the participation of all company employees including Senior management, managers and workers at all levels of activities such as market research and development, production planning, design, production preparation, purchase, sales management, manufacturing, inspection, sales and
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after-sales services, financial controls, administrative and training personnel. Quality control which is done in this approach is called company level quality control or total quality control (Nicholas, 1998). According to this philosophy, awareness of various aspects of the quality of goods or service is called Total Quality control that focuses on the details of self-regulation operation at all levels and encourages all company members to achieve quality improvement objective. This philosophy that was developed in Japan in the postwar period by Deming has been used both in Manufacturing operations and proposing services. Ishikawa, in the book of total quality control, Japanese approach, has defined quality control in this way that “quality control means development, design, production and proposing services and products with economic and usable quality that result in permanent satisfaction of consumer.” Thus first step in quality control is to understand the needs of consumers.
5- Inventory management The main emphasize of just-in-time manufacturing system is to reach the objective of zero inventory. In order to achieve this goal, inventories must be removed. JIT system is not an inventory control system but it is a philosophy for continuous improvement of quality which focuses on stopping production and producing correct product rather than correction. Inventory reduction causes saving in needed storage space and capital. Inventory reduction also helps to reveal hidden problems that inventory increase has prevented them by creating buffers. The problems of machinery stop, inappropriate relationships with suppliers, bad quality of materials, unreliable vendors, timing issues, and permanent and unsolved problems in the management are hidden by inventory increase. Another advantage of a low or zero inventories can be considered to enhance creativity and problem solving in the system.
6- Preventive maintenance (TPM) Since in JIT environment, inventory in stream is low, Machine disability is extremely disruptive and expensive. Therefore, companies use preventive maintenance to be able to keep the devices and machines in good working condition. However, there is still the possibility of failure (Moshabbaki, 1996). The purpose of preventive maintenance is to maintain machines and equipment in good condition and replace parts that are likely to be ruined, before real damage. Line workers take responsibility for maintaining the machines. However, by preventive maintenance, it is likely that some occasional deviations occur and in fact occasional defects are inevitable (Fadavi, 1996).
7- Cooperation and involvement A successful JIT environment should have the cooperation and involvement of everyone in the organization. When people cooperate in planning their business activities and measure what they have done, in fact, they are considers as managers of organization. The philosophy of employees; collaboration and cooperation is as follows (Gerhard, 1993): 1- Team action: team action places staff within teams and groups so that their minds work as their hands. Employees are asked to be part of a team, involve in problems, and seek solutions for them. These teams are organized in a way that engineers along with shop staff and accountants all work together as a team. 2- Empowering vs. top-down management: empowerment Includes submission of power to employees to make decisions. If employee's team makes a decision, they have the ability to perform it. Upward decision stream is opposed to the traditional top-down management. 3- Shorter Organizational charts: Channel of communication between senior management and line workers needs truncation with empowerment that can increase control of managers and it will not allow the number of middle managers exceed necessary limit. 4- Share profits: motivation along with team action is called profit sharing. Employee benefits from their participation in the organization will make the sharing of benefits. 5- Job security: An essential principle to support motivation and quality improvement is that main concerns related to primary need of workers has alleviated. If employee refrain to propose their suggestions because they fear to lose their job, or avoid asking question due to harassment and losing their jobs, most of progresses that could have happened, will never occur.
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Academic Journal of Research in Business & Accounting Vol. 2, No. 9, September 2014 6- Overall training and job rotation: Employees every two years are dismissed from a previous job and trained to learn a new job. They not only learn how to do the job but also they have been trained about the quality and maintenance alongside the work. The principle is that Employee has a background in company operations and valuable affairs for company to make improvement and progress.
8- High quality levels Just-in-time manufacturing system requires high quality because small production categories and lack of storage, if a problem occurs, cause to stop production flow inevitably to fix the problem. Obviously complete stop of production flow is costing and disrupt amount of planned production. Therefore, it is necessary to avoid stop or quickly resolve any arising problems. Just-in-time manufacturing systems deal with quality matter in three directions. The first aspect quality design is about product and production flow. The fact that just-in-time systems produce standardized products lead to the creation of standard operating procedures. Also, it causes to train workers who are familiar with their duties and employ standard equipment in labor. The second aspect focuses on the quality of raw materials and components to reduce discontinuity and rupture due to the poor quality of raw materials and components. When there is sufficient confidence on raw materials and purchased components, their inspection time and cost will be eliminated practically. The third aspect is that workers must be required and committed to produce excellent quality products. It includes providing appropriate equipment for the performance of work, providing appropriate training in work methods, providing required training for quality measurement and disclosure of errors, Support and encourages efforts of workers to improve quality, Appreciation of the workers who strive and solve problems in the advent of problems (Fadavi, 1996).
9- Production leveling or Heijunka In JIT manufacturing system, movement toward higher levels of control is very important to reduce waste. Tool that can be used to do this is production leveling. Heijunka is the Japanese name of production leveling where the producers attempt to maintain a constant output level for several days (Chase, 1989; Womack, 1990; & Fawaz, 2003). Heijunka is an accepted concept from Toyota system to reduce the cost of manufacturing units and components of the product which have been more than number of units that can be sold. To accomplish this objective, production planning should be leveled in effective procedures in order that appropriate quantity of units and labor to be used in an efficient manner. If production level does not be constant, it will cause waste in the form of work in process or other forms and occupying more space.
10- mistake-proofing or Poka Yoke Poka Yoke is a Japanese term used in the lean manufacturing terminology. This term is simple mechanisms that help to avoid manufacturing operator mistakes without need to operator care. In most cases Poka Yoke is a very simple and often inexpensive visual innovation that prevents product defects. Important point about this mechanism is that 100% of the components are checked without the need for operator attention. Poka Yoke was proposed and popularized first by Shingo in the book "Zero Quality Control: Source and System Inspection and Poka Yoke ." Shingo came to the conclusion that mistakes are usually occurred but the application of Poka Yoke was Easy therefore, it can prevent mistakes that reach client and consumer. This is an effective, relevant and cheap approach to reduce production defects. Poka Yoke is one of the essential elements of Zero Quality Control (ZQC) system and an idea which causes to manufacture products without defects. This method uses instruments or techniques that show mistakes or prevent occurrence of defects from the first stage of labor. Poka Yoke is actually a simple way to achieve without defect product. Poka Yoke is based on respect to the wit and intelligence of workers. Poka Yoke, eliminating repetitive tasks and activities that are associated with memory and caution, frees up time and thought of workers So that they can devote their time to value creation activities. In complex working environment, some tasks may be done wrongly and every day it is possible that these mistakes lead to the production of defective products. Defects are considered waste and if they are not recognized, they will despair customer quality expectations. Poka Yoke is based on the belief that even a small number
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of defective items should not be produced. To become a global competitor, a company should not only pursue the production philosophy of zero defects (non-defective product), but also it should apply it in practice. Poka Yoke approaches are simple concepts which are used to fulfill this purpose. The meaning which can be inferred from this term is forecasting pre-emptive measures to prevent the entry of potential mistakes in the production cycle. In fact, fundamental logic of this concept is based on achieving proper production in the first opportunity. In other words, Poka yoke is to install very clear and simple tools on manufacturing equipment to prevent mistakes of workers.
11- Simplification of work - standardization of work An important principle of the elimination of waste is standardization of work. Standardization of work is overall confidence that every work and task is organized and implemented effectively. It is not important who does the work but the quality level. In Toyota all workers comply and use the same processing time that includes the available time required for completion of the work and parts. This process is assurance that balancing of production lines has been conducted, unnecessary work in process inventory has been minimized, and non-value-added activities have been reduced (Harrison, 1992; Nickolas, 1998). The tool used for standardization is called "Time Takt". Takt is a German word meaning Rhythm or beat or rhythmic. It is also called “costumer demand amount” or “costumer demand rate” or “The number of items the customer demands per unit of time.” Takt Time =
12- production flexibility JIT system requires producing various products in a production line every day. This can lead to a contradiction between the diversity of customer demands in the market and the current production process to meet that demand. By modifying single purpose specific technical machines and which are used for mass production also adding instruments and equipment on them, they can be changed into multipurpose machines with the ability to produce a diversified range of products according to market demand. Such machines support just-in-time manufacturing and facilitate production leveling. However, the final state of this situation is flexible manufacturing system (FMS). The ability to quickly transfer goods from one item to another item is a function of various factors of production and setup time reduction, labor laws, employee flexibility and flexibility of equipment. Recently, labor unions have made many efforts to change laws to allow workers to carry out operations that were previously limited to certain workers. These changes include training employees to perform different operations that are necessary for increased flexibility. When the production quantity is not able to provide equipment, flexibility can often be increased substantially with a slight modification of equipment. Flexible manufacturing system (FMS) cell is a machine with ultra-automated group technology including groups of processing workshops and further machines of numerical control NC, or computerized numerically controlled CNC tool. Acquiring the most production flexibility in order to compete and produce and variety of products, Increase productivity and reduce production costs are the main reasons to use flexible manufacturing systems.
13- Cellular manufacturing system Cellular manufacturing system which is often called lean manufacturing has developed in recent years in the global production processes. Nowadays the most common cellular manufacturing system or lean production system is Kaizen system. Kaizen uses cellular technology and manufacturing to reduce wasted time, labor, money and resources in the production process. Cellular production design is in contrast with the traditional production line. In traditional production line, many workers require services of a single production line that receives raw materials and deliver finished products and any problem in workforce or machinery in any part of the line usually leads to stop of whole process until fixing the determined problem in production line. In cellular manufacturing, products are divided to groups or cells of workers or production machines, therefore any problem in a cell due to equipment defects or workforce problems, does not make essential effect on other production parts. Technically, concept of cellular manufacturing is simple basically, obtaining manufactured product from raw
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Academic Journal of Research in Business & Accounting Vol. 2, No. 9, September 2014 materials in an efficient form which is profitable. Cellular manufacturing design and system necessarily divides production line to sections and cells that sometimes is called measure or module. Each cell includes workers and machines which is allocated to a certain part of manufactured product. Primary goal of cellular manufacturing is to reduce cycles and inventories in order to respond market at required time. Other benefits of cellular manufacturing are space reduction, quality improvement, reduced labor cost, and using appropriate machinery. A cell is a combination of people, equipment and organized work stations to flow processes to whole production or part of production units (Wilson, 2009). Each cellular production system must have the following characteristics: 1- It must include one or more smaller components of stream 2- Equipment should be appropriate and highly specific size for cellular operation. 3- Cellular manufacturing is usually set in the form of C or U So that the raw material entrance and finished product exit can be easily monitored. 4- To achieve flexibility, trained and multi-functional individuals must be used. 5- Usually, C, or U-shaped cells cover less space.
14- Lead Time and Cycle Time Reduction Lead Time and Cycle Time Reduction in JIT environment enables companies to respond quickly to customers' needs by reducing the time required for production and delivery to customers. In manufacturing, delivery time (Lead Time) covers from design to delivery of products and service to customers. Thus lead time includes products improvement (design), resource supply (purchase), production (manufacturing), ordering process, distribution, clarity, decision-making and coordination. Production lead time is only part of whole lead time but that is the only part that can be controlled by the production function. To maintain low inventory levels, it is essential that renovation of Lead Time be shorter as much as possible. However, just-in-time philosophy is essentially an attempt to reduce Lead time. Lead time renovation process may be reduced by putting vendors place near the buyers’ factory. Production Lead Time includes 5 elements of wait time, move time, queue time, setup time and run time. Lead time reduction can take place by transferring workshops and matching them together, using group technology (GT), the use of cellular manufacturing concepts, reducing queue length and improving the cooperation and involvement between lower processes of the set.
15- Reduction of Set-up time Setup Time is the time spent in an operation to do a task. Setup time is the time consumed to create physical changes in the production line to produce a new product and Runtime is the time spent to modify the production line to produce products with a certain specified quality. Runtime can help to production lot size reduction, inventory reduction, and setup cost reduction, increase the capacity of used equipment, help to eliminate setup wastes, and potentially reduce quality and obsolescence problems. Potential advantages of reducing the time of changes in production line can include productivity increase, inventory reduction, capacity increase, and work in process decrease and flexibility increase. Reducing production time enables the company to show better and faster reaction to changes in customer demand. One of the most important factors to reduce production time is setup time reduction. Additionally, the more the setup time is, the tendency to produce more of the products is higher. Reducing setup time makes it possible to produce a small amount the product each time you set up the machines which provides a broad inventory reduction. Companies use different approaches to reduce setup time. One of this approaches is using Cellular manufacturing in which goods or similar goods are produced each setup of machines. Another approach to improve setup process is through employee training to setup immediately but the most important approach is automating setup and manufacturing process which is done through computer integrated manufacturing (CIM). In this case, it is the computer who gives the necessary instructions and equipment will set up automatically.
16- Small lots of production JIT Systems during the manufacturing process or in the receiving of goods from suppliers are known by small production lots. Such small lots lead to advantages that enable JIT system to operate more efficiently. One of its advantages is that movement of small lots in the system reduces
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inventories during operation more than when lots move in larger size. This reduces storage cost and space requirements. Another advantage of small lots is that it reduces chaos in the workplace. Third advantage is that due to the reduction of elements in each production lot, for inspection and rework, when dealing with issues relating to quality, inspection and reworking costs are reduced.
17- Multi-skilled workers It is common in traditional manufacturing environments that a worker has a very limited task. For example, just work with a machine, justify the machine or do its maintenance operation. But in JIT system all of these tasks are gathered in a set and put in charge of multi-skilled Worker. This means that main duty of the worker is just one of these tasks but learns other task as much required. Also, workers are trained to be able to perform more manufacturing operations. Obviously, implementation of this policy means that if the Worker of workstation before or after a person was in trouble so he can fix the problem and to prevent delays in the production.
18- Autonomation or JIDOKA JIDOKA or automation with the human senses is another concept that is an integral part of lean manufacturing. Toyota Production System model is often a cell with two columns that one of these columns shows just-in-time manufacturing and the other is the concept of JIDOKA and cell without these columns will not stay stable. But there are still many that regardless of this mechanism are related to columns which hold the whole system, focus on the mechanism of using one part of stream, pull production and standard work. JIT system is relatively well understood, but many unsuccessful applications can be traced in the second pillar of this building. In JIDOKA which is also called autonomation, Machine diagnoses the problem and instead of continuing to produce a bad product, stops production. Basic principles of JIDOKA return to the year 1902 that Toyota provided a simple but clever mechanism which diagnoses problem and turns off devices automatically. This invention allows operators to monitor up to 12 devices, while maintaining excellent quality. Of course, this system has progressed and exceeded. JIDOKA columns is often called stop and responding to any type of disorder And it is clear that this concept is much more than a stopping machine and it refers to any kind human or automated process that is able to automatically detect and stop abnormal conditions. JIDOKA is often defining as a four level process which is activated when an abnormal event occurs: 1- Diagnosis, 2- stop, 3- immediate stabilization or correction of conditions, and 4- Check the root problems. JIT is a powerful system that removes unnecessary cost factors and helps to identify problems that would cause wastes. It is relatively easy to implement JIT but without JIDOKA, its setup and support, will quickly wear out and waste will take the way back. If the JIT and JIDOKA are used together, they will be like a Kaizen engine which causes the system work better. In fact JIDOKA is automation with a human element and describing design characteristics of machine under the influence of JIDOKA principles is called autonomation. Autonomation means automation with human senses and its origin returns to the ability of a device to stop, when the standard condition exists, and over time, it has taken a broader meaning and often refers to ease of diagnosis. Diagnosing abnormal situation requires identifying normal conditions. In ancient Japan, JIDOKA has been a term for autonomation, and related to the principle of automatic stop in difficulties. The main purpose of an autonomation process is to eliminate the human element and replace it with a system that allows all line to work automatically or with minimal human involvement which in result, number of production line labor are reduced and workforce does the work of more than one station at the same time. “Andon” system is one of the constituent elements of the JIDOKA concept. Andons are like traffic lights that are installed in each production line of Toyota and are part of the Toyota visualization. When production path is smooth, the light is green; but when a worker works in a production line, status can even be changed to yellow; and when the problem is diagnosed, the condition can even be modified to Red and Line is stop. Andon is a type of visual control which indicates the current status of the work, for example, unusual circumstances, the structure of the work, and progress information. In fact, Andon is one of the main tools of JIDOKA which is in the form of electronic boards containing lights to show the status of the current operations.
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19- Coordination of works or Yo i don Another application of Andon system is coordinated production of elements or modules that are transferred to other part of assembly. Coordination of work is not a race to produce faster, but the purpose is that all individuals coordinate with each other to carry out their duties in a given time. As a result, if there is delay time in the system it can be completely eliminated or minimized. Yo i don system uses andon lights to coordinate production operations (Khatami, 1994).
20- Good House Keeping Japanese companies use 5S in a wide range which is related to housekeeping (Harrison, 1992). The basic process of housekeeping is described by breaking it down to organizing, cleaning, clarity, standardization and discipline. Keeping or housekeeping of workplace is a factor that results a clean workplace and a clean workplace leads to do working activities in a better way and so productivity increases and security of employees are kept better.
B) Supply chain management Supply chain management has emerged as one of the infrastructure fundamentals of business implementation. A critical issue in supply chain management is to control and coordinate all these activities. Supply chain management (SCM) is a phenomenon that will do this in a manner that costumers can receive reliable and quick and qualified products at minimum cost. Supply chain management is a set of methods that is used to effectively integrate suppliers, manufacturers, warehouses and stores, to produce required product in specified amount, in a given time, a given place and supplied to customers; to minimize total cost of chain as well as the needs of customers are provided with high service levels (Simchi & Kaminski, 2000). In majority of our manufacturing units, still the traditional view control operational planning of units associated with the provision of a product and component units of the supply chain of a product alone make decisions in order to optimize their benefits that in most cases this will lead to increase the cost of chains and product cost and will reduce competitiveness of companies (Sadeghi Moghaddam, 2009). The role of inventories is essential in the success or failure of the supply chain, thus Inventory level coordination throughout the supply chain is important (Stevenson, 2004).
1- Integration of costumers Fast and flexible markets today, Customer satisfaction and customer value have increased. Today, companies cannot rely on financial measures to control their own situation but should seek other measures for costumer value and satisfaction. Customer satisfaction concept is about how current customers use and feel about the products and services (Fawaz, 2003). By evaluation of existing customers, the company can obtain an insight related to required levels of improvement and creation of ideas for products and services satisfaction. Another importance of this concept is costumer value. Customer value refers to how customers perceive the products and services offered by the company. In fact, customers are always looking for better quality products, low-cost, value-added services and greater flexibility, and access in shorter times. One of the principles of supply chain management is the ability to respond to customer requirements in a fast and flexible manner. The response contains the physical distribution of products, order status and availability of this information. Customers usually are associated with the status of their order and often it is even more valuable than shorter lead time. Licensed customers can achieve changes in the initial design process to improve customer value. Value-added services can play an important role in the relationship between customers and companies. Support and maintenance are important from customer perspective. This is especially important for technical products that require constant after sell services. Having proper value-added services can make more money and cause a closer relationship between company and its customers.
2- Integration of suppliers Suppliers are one of the most important success factors of JIT growing production system. Considering that cost of materials account more than half the cost of goods sold in most firms, Institutions can not consider suppliers as stranger characters rather they should be seen as part of the team. Integration of suppliers was proposed first in 1950 by Toyota. Toyota classified suppliers in
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different functional rows that each row of suppliers had assumed different responsibilities. First row suppliers were responsible to cooperate in the task of product improvement. Suppliers were asked to produce a product for a specific purpose and by specific function, they were then asked to present the product experimentally and receive production order of the product has the specified function. The philosophy of Toyota was to encourage first row suppliers to cooperate and share information with others in order to improve design process.
3- Just-in-time purchase Most companies that use just-in-time production systems also use just-in-time purchasing system. In a just-in-time purchasing system, purchased Raw materials are rapidly absorbed by the manufacturing process. In this system, it is expected that Suppliers, according to the specified schedule, deliver qualified goods and timely receive certain amount of goods and raw materials. Suppliers must inspect the goods and to ensure their quality. Such procedural completely eliminated costs such as inspection, storage, maintenance and handling of materials that do not create valueadded. Just-in-time purchasing (JITP) is defined as the purchase of goods delivered to them immediately before the application is made, or purchases that are in demand for use. In JITP activities, selection of suppliers, product improvement, and production in small batches is especially important. Strong relationship with suppliers is one of the most important factors of Just-in-time purchasing system because if a supplier fails to deliver raw materials on time, production stops. Communicate with multiple suppliers is time consuming and requires a lot of time that require long-term contracts. So companies who make use of JIT systems, try to choose a few and reliable suppliers.
4- Integration of production During the last decade, one of the main themes in the literature of supply chain management is the integration as an important factor in achieving success (Nazemi & Kharidar, 2012). The link between customer and supplier in supply chain is manufacturing and construction and many of the main processes of real product is in production location. The main objective of supply chain is reduction of system cost and waste. Integration between suppliers, producers, and distributors is essential for the efficiency of inventory management in the system. In order to minimize the inventory of manufacturers, efficient inventory policy is dependent on the specific nature of the supply chain. With integrated supply chain, most of the losses that occur in system, can be eliminated or reduced which includes all inventories of any form. Surplus production in company increases Lead Time, thus reduction of these wastes has essential impact on system cost minimization.
5- Value Stream Mapping Value stream links companies that are along value chain and includes creation, development, sell and provide services to a group of similar products. Value stream includes all activities carried out within the company which involves the design, manufacturing and supply of a specific product and offering services to customers after sales (Baggaley & Maskell, 2003). Value stream mapping (VSM) is a technique that is used to identify waste in the value stream for a product. When the wastes were determined, it will be easier to plan for eliminating them. VSM is a process aimed at improving the level of system (Lean Business Institute, 2009). In fact VSM is a certain type flow chart of that uses known symptoms as lean language to depict and improve information and inventory stream. The purpose of value stream mapping is to develop desired and optimized value for costumers through creating full value process with minimum wastes for the design (according to customer), production and maintenance used in life cycle. VSM can be developed for whole of business process or parts of it according to need. Major benefit of value stream mapping is focusing on the entire value chain to identify waste in the system and attempt to remove barriers (Wilson, 2009). VSM is a tool designed to highlight activities and in lean terminology it is called kaizen activities. Value stream maps are of 3 types. Present State Value Stream Map (PSVSM) represents the current state of, Future State Value Stream Map (FSVSM) is derived by eliminating waste (can be obtained within 3 to 6 months) And the ideal state value stream map (ISVSM) that can be achieved by eliminating all the wastes of value stream (Paneru, 2011).there are Several simple and complex tools for value stream mapping but analysis usually takes place following the same path (Rother, 2010).
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Academic Journal of Research in Business & Accounting Vol. 2, No. 9, September 2014 1-Select a product family or value stream for analysis, 2- Identification of process steps, what exactly should be done? Why and the processing time of each stage, including the entire VA, NNVA and NVA activities, 3- Whether the process is distinct or shared with other families of products?, 4- In which point the value of the inventory is kept and how much?, 5- How are processes able to identify the products that must be generated (information stream)?, 6- Which processes need to be changed?, and 7- identification of processes that require modification in order to response costumer need properly. Value stream management and lean accounting are designed in order to support lean manufacturing in which value is defined from costumer perspective, labor is organized by value stream, supply stream is defined from demand pull view, and employees are empowered and focused on quality and continuous improvement (Brosnahan, 2008).
Conclusion General objectives of just-in-time manufacturing system are to provide goods or services that customers' need, deliver goods and services when costumers need, reduce lead time of goods and services, Improve manufacturing capability, Reducing the circulation time of production, Effective and efficient use of resources, Remove and limit waste, non-value added activities, Minimizing inventory and reducing work in process, Reduce cost and increase profitability by customer satisfaction, Warranty service and commitment to quality of goods and services (Rahnemay Roudposhti, 2006). In fact, it can be said that just-in-time system which first time was proposed as a Japanese management philosophy; in United States it is considered a renaissance in manufacturing techniques (Rahnemay Roudposhti, 2000). Such precise system requires proper planning, effective coordination, involvement and close cooperation between staff and managers and it achieves when desired organizational culture and actual work ethic and voluntary discipline and self-regulation exist in a group work.
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