Beruflich Dokumente
Kultur Dokumente
Abstract
Japanese production management (JPM) became a dominant influence in the field of
operations management when, in the early 1980s, knowledge of its main elements
became known beyond Japan. Those elements – quick set-up, small lots, cells, kanban,
and so on – are well known. Rather than explaining them again, this paper’s objective is
to explore the sequence of events leading to JPM as a competitive force globally, as well
as its impact on theory and practices in operations management. JPM’s evolution
includes shifting terminologies, fusions and adulterations; limited extensions from
manufacturing into services and innovative enhancements, largely of Western origin.
Longitudinal research data, based on inventory trends, provide insights on JPM’s
diffusions and its uneven results. Latter-day puzzling lapses and disappointments, among
Japanese as well as Western companies, raise questions about JPM’s sustainability, as
well as some of its changing manifestations. While the core of Japanese production
management, now over three decades old, appears to have become solidly mainstream,
its current and future states are problematic.
At one point of time, the quality of Japanese export goods had as poor an image as any
in the developing world. The Japanese were determined to do something about it in the
post World War II industrial rebuilding era. Becoming aware, getting organized, and
implementing Western quality control techniques (chiefly statistical sampling)
constituted the thrust of the first fifteen years of quality control emphasis in Japan.
Today, Japanese quality control practices are widely respected. Japanese total quality
control particularly emphasizes:
These and other practices form a contrast to traditional (e.g., pre-1980s) Western
manufacturing, which tended to emphasize mass production, full capacity utilization, and
the economies of scale that were presumed to follow.
QUALITY CIRCLES
In Japan, quality circles consist of groups of about 10 workers who meet weekly, often on
their own time. The groups typically include foremen, who usually serve as circle leaders.
Quality circles focus on concrete aspects of the operations in which they are directly
involved, using tables and graphs to communicate the statistical details of their quality
issues. In one common format, problems are categorized by materials, manpower, and
machines.
Quality circles provide a means for workers to participate in company affairs and for
management to benefit from worker suggestions. Indeed, employee suggestions play an
important role in Japanese companies. Two associations, the Japanese Association of
Suggestion Systems and the Japan Human Relations Association, were developed to
encourage this process. Japanese employee suggestions reportedly create billions of dollars'
worth of benefits for companies.
ELIMINATING WASTE
The driving force behind the Japanese system of production is eliminating waste, thereby
maximizing process efficiency and the returns on resources. A wide number of principles
and practices can be employed to achieve this goal. As Shingo once noted, people
instinctively know to eliminate waste once it is identified as such, so the task of reducing
waste often centers first around identifying unnecessary uses of human, capital, or physical
resources. After waste is targeted, new processes or practices can be devised to deal with it.
PROCESS IMPROVEMENT
Major process improvements often occur through a series of smaller initiatives, summarized
in the Japanese word kaizen, or continuous improvement. In the classic example, Toyota
dramatically reduced its die-changing time over a two-year period. In 1970 it took the
company four hours to change a die for a 1,000-ton stamping press. Six months later, the
changing time had been cut to one and a half hours. The management then, under the
leadership of Taiichi Ohno, set the formidable goal of reducing the time further to just three
minutes.
Shigeo Shingo, already a highly regarded manufacturing consultant, was employed to design
a process that would meet this objective. He approached the problem with two guiding
principles: lowering the complexity of the changeover process and standardizing the tools
used in it. Shingo looked at such factors as what kinds of fasteners were used to hold dies in
place and how much time and variability was involved in performing various tasks during
changeover. The result of his work was that by 1971 Toyota had indeed achieved its goal of
a three-minute die change.
Other kinds of process improvements resulted from such philosophies as well. Whereas
process improvement in many Western firms focused on training workers to master
increasingly complicated tasks, the drive in Japanese manufacturing was to selectively
redesign the tasks so they could be more easily and reliably mastered. One example is the
concept of poka-yoke, also pioneered by Shingo in the 1960s, which involves designing a
foolproof process to eliminate the chance of errors. Such a process usually consists of a
simple yet definitive physical test of whether something is being done correctly. One type of
poka-yoke, for instance, is when a part is designed to only be inserted into an assembly
right-side up (i.e., it won't fit otherwise), removing the possibility that it can be inserted the
wrong way. Three-and-a-half-inch computer diskettes contain this kind of poka-yoke. Other
kinds of poka-yokes test the shape of manufactured products for defects or monitor steps in
a production process to ensure all are completed and in the correct sequence. Poka-yokes
have been widely developed to minimize worker error and improve quality control.
VALUE ADDED
TPS and similar Japanese manufacturing techniques distinguish between activities that add
value to a product and those that are logistical but add no value. The primary—even the
sole—value-added activity in manufacturing is the production process itself, where
materials are being transformed into progressively functional work pieces. Most other
activities, such as transporting materials, inspecting finished work, and most of all, idle time
and delays, add no value and must be minimized. When processes are examined for
potential improvements and cost cutting, reducing non-value-added activities is often the
highest priority. Conversely, processes that add the most value, even if they are expensive,
will usually not be compromised to achieve lower costs at the expense of quality.
Another area of waste that is a special concern in the Toyota system is excess inventory. The
idea is to produce without accumulating inventory, a condition known as non-stock or just-
in-time production. In such a process the company produces goods at the exact quantity
and schedule that they are required by its customers. To produce more than customers
actually need—or sooner than they need it—is considered overproduction, leading to a
build-up of stock or inventory. Overproduction can also occur internally when different
steps of a manufacturing process aren't synchronized and excess materials or semi-finished
products accumulate. Systems like the Japanese kanban established a set of often simple
visual cues in the factory (e.g., when no work-in-progress is waiting in a painted square on
the floor, it is a signal to advance the next item into the process) to help coordinate and
synchronize the flow of materials and work.
Carrying inventory is wasteful because the company must store it or perform other
additional handling that increases the total cost of its operations. By minimizing the need for
such storage and handling, the company can reduce both the direct costs of
holding/handling inventory as well as the indirect costs of tying up capital in the form of
excess inventory.
ORDER-BASED PRODUCTION.
A natural and necessary extension of the non-stock goal is that manufacturers need specific
customer information to drive their production decisions. Obtaining this information
necessitates effective market research/forecasting and communication with customers. As
much as possible, production under the Japanese system is guided by actual orders, rather
than anticipated demand based on less reliable information such as past sales. The order-
based system is said to provide production "pull" from the actual market, as opposed to
"push" that stems only from the manufacturer's conjecture.
TRANSPORTATION
The Toyota Production System also recognizes waste in the excess movement of items or
materials. In general, the more transportation required, the less efficient the process, since
moving goods back and forth is normally not a value-adding procedure. Transport waste is
usually addressed by changing the layout of a factory, its geographic location relative to its
customers, and so forth. While sometimes transportation problems can be mitigated
through automation, the ideal under the Japanese system is to minimize it altogether. Cell
and flexible manufacturing layouts are one approach to controlling transport waste.
It is important to note that reducing transportation costs may be at odds with other goals of
the Japanese system, particularly small-lot, order-based production, which leads to smaller,
more frequent batches of work and thus more deliveries of materials or finished goods. This
can potentially increase the amount of resources devoted to the transportation function,
aggravating the need for transportation efficiency. Ideally, the overall process chosen will
minimize total costs by striking a balance between the wish to eliminate inventory and the
wish to reduce transportation costs.
QUALITY BY DESIGN
MARKET-DRIVEN PRICING
In contrast to the traditional practice of setting prices by marking up some percentage over
the cost of manufacturing, the Japanese system attempts to identify the market-determined
price for a good and then engineer the manufacturing process to produce at this price
profitably. Under this principle, increases in costs are not passed on to the consumer in the
form of higher prices. As a corollary, the only way for a firm to increase profitability is by
lowering costs; lower costs may also allow the company to be profitable yet deliver products
at the low end of the pricing spectrum, a practice central to the rise of the Japanese auto
manufacturers in the U.S. market.
WORKER FLEXIBILITY
In practice, this often translates into individual workers running several machines
simultaneously, a practice called jidoka, with the machines designed to eliminate both error
and the need for constant supervision. Having multiple responsibilities also gives rise to the
need for special safety accommodations to reduce the chance of injury in an integrated
work environment. In the legendary Toyota production reforms, converting to a multi-
machine worker system reportedly achieved 20 to 30 percent gains in worker productivity.
And these concepts were established using following techniques and methods
Introduction
Just-in-time manufacturing keeps stock holding costs to a bare minimum. The release of
storage space results in better utilization of space and thereby bears a favorable impact
on the rent paid and on any insurance premiums that would otherwise need to be
made.
Just-in-time manufacturing eliminates waste, as out-of-date or expired products; do not
enter into this equation at all.
As under this technique, only essential stocks are obtained, less working capital is
required, to finance procurement. Here, a minimum re-order level is set, and only once
that mark is reached fresh stocks are ordered, making this a boon to inventory
management too.
Due to the afore-mentioned low level of stocks held, the organizations return on
investment (referred to as ROI, in management parlance) would generally be high.
As just-in-time production works on a demand-pull basis, all goods made would be sold,
and thus it incorporates changes in demand with surprising ease. This makes it especially
appealing today, where the market demand is volatile and somewhat unpredictable.
Just-in-time manufacturing encourages the .right first time. concept, so that inspection
costs and cost of rework is minimized.
High quality products and greater efficiency can be derived from following a just-in-time
production system.
Close relationships are fostered along the production chain under a just-in-time
manufacturing system.
Constant communication with the customer results in high customer satisfaction.
Over production is eliminated, when just-in-time manufacturing is adopted.
Disadvantages:
Precautions:
Management buy-in and support at all levels of the organization are required; if a just-
in-time manufacturing system is to be successfully adopted.
Adequate resources should be allocated, so as to obtain technologically advanced
software, that is generally required if a just-in-time system is to be a success.
Building a close, trusting relationship with reputed and time-tested suppliers will
minimize unexpected delays in the receipt of inventory.
Just-in-time manufacturing cannot be adopted overnight. It requires commitment in
terms of time and adjustments to corporate culture would be required, as it is starkly
different to traditional production processes.
The design flow process needs to be redesigned and layouts need to be re-formatted, so
as to incorporate just-in-time manufacturing.
Lot sizes need to be minimized.
Work station capacity should be balanced whenever possible.
Preventive maintenance should be carried out, so as to minimize machine breakdowns.
Set up times should be reduced wherever possible.
Quality enhancement programs should be adopted, so that total quality control
practices can be adopted.
Reduction in lead times and frequent deliveries should be incorporated.
Motion waste should be minimized, so the incorporation of conveyor belts might prove
to be a good idea when implementing a just-in-time manufacturing system.
Conclusion
FEATURES KAIZEN
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.
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.
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.
Customer orientation.
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.
Use of techniques and tools suitable for the company is one of the main factors of
TQM.
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.
Continues improvements
TQM implementation is not a onetime exercise. As long as the company practices
TQM, the TQM process should be improved continuously.
Subcontracting
Large companies, particularly in manufacturing sector, rely heavily on a regular
subcontracting system. To secure punctual and regular supply of quality parts and semi
finished products from subcontractors at various levels, large companies provide smaller
ones with technical, managerial and financial assistance in various forms. This way, the
large and small companies need not compete and contract for every supply and
purchase. Mutual trust is the basis of their long-term transactions.
A general format of subcontracting can be as following:
large
manufacturer
Step 1. Corporate goal setting: master schedule. Select companywide numerical goals and
targets.
Step 2. Top-down explosion process. Explode the master schedule (corporate-level goals
and targets) systematically into actions by specific departments (or by specific product lines)
and select numerical goals and targets for individual departments (or specific product lines).
Repeat Step 2 until goals and targets are selected or assigned to all layers of relevant
organizational units and individuals.
Step 3. Implementation and assessment. Implement the overall plans. Compare the
corporate performance with the originally set goals. Use the empirical information obtained
in previous rounds of TPM in Step 2 of the next round.
Kanban should be an element of a JIT system. It makes little sense to use a pull
system if it takes interminably long to pull the necessary parts from the producing
work center, as it would if setup times took hours and lot sizes were large.
The parts included in the kanban system should be used every day.
Very expensive or large items should not be included in kanban. Such items are
costly to store and carry. Therefore their ordering and delivery should be regulated
very closely under the watchful eye of a planner or buyer.
The oldest and most widely used inventory system in the world is the reorder-point
system (ROP). The simple reorder-point rule is: When stocks get low, order more. But
ROP results in high inventories. More parts and raw materials are ordered for the sake
of the rule rather than because of need. Manufacturers that use ROP do so because of a
difficulty in associating parts requirements with the schedule of end products.
Material requirements planning (MRP) provides a better way. MRP harnesses the
computer to perform thousands of simple calculations in transforming a master
schedule of end products into parts requirements. But MRP shares one weakness with
ROP. It is lot-oriented. The computer collects all demands for a given part number in a
given time period, and recommends production or purchase of the part number in one
sizeable lot. MRP companies order in lots, rather than piece-for-piece.
MRP is a very expensive undertaking. Its approach is to attack problems with complex
solutions, i.e., computer systems. Where there are many stages of production, MRP or
synchrony-MRP may be necessary. In most cases, however, money is better spent on
JIT/TQC than on computer-based planning and control. The main lesson from the
Japanese is that simplification is generally the safest path to improvement.
Kanban is the visible record that triggers an order for more parts. If a Kanban arrives at
a work center signaling the need for more of a given part, that part is needed right away.
It must be possible to set up the part fast enough to economically make the very small
quantity required. Other work centers will send more kanban to signal the need for
other parts, and numerous new setups will be required each day as the kanban arrive.
An assembler whose production has been slowed by some problem or who is not able to
keep up with the speed of the line turns on the yellow light, which is the signal for a
roving master assembler to come and help. If the problem is severe enough, the line
comes to a halt. Then master assemblers, supervisors, foremen, and all idled line
workers help get the line going again.
The red light brings frowns, but plant management is pleased when many of the yellow
lights are on. The main reason for the yellow light is too few workers on the line to
handle the rate of output. If no yellow lights are on, management knows that the line is
moving too slowly or there are too many workers. Usually, the response is to pull
workers off the line and assign them elsewhere so that it becomes hard for the
remaining workers to keep up. So yellow lights begin to come on.
Mixed-model sequencing is used to make close to the same mix of products that is sold
that day. This avoids the usual cycle of a large buildup of inventory of a given model,
followed by depletion to the point of potential lost sales as the next model builds up.
Moreover, when mixed models are run in final assembly, the same mixed-model
schedule may govern the making and delivering of component parts, ideally even from
outside suppliers. Planning and control are simplified, capacity requirements are
reduced, and buffer inventories are slashed – with all of the attendant quality and other
just-in-time benefits.
Color-coding, is widely used in Japan. The ideal is zero time for a worker to hunt for the
part needed – and also for the materials control people to hunt for the right location
when restocking. Precise placement and identification of parts for assembly-line
workers may save them some motions and make the work less tiring.
The Japanese were upbeat on conveyors about ten years ago; now they try to avoid
them. This is because conveyors hold inventory. Quality control is not precise when
inventories are on moving conveyors. Conveyors push inventory forward, whether
needed or not. Conveyors are also subject to breakdown, a serious concern in a JIT
factory, in which there is little or no buffer inventory. Conveyors are expensive to buy,
install, maintain, and relocate.
The just-in-time system enables manufacturing to react quickly to changes in the mix of
products and models sold in the market-place. This of course assumes that the company
has labor flexibility so that employees may be reassigned as necessary to produce the
products and models demanded. Such labor flexibility also provides limited protection
against worker layoffs.
B. The information flow: It involves transmitting orders and updating the status of delivery.
C. The finance flow: It consist of credit terms, payment schedule and consignment and title
ownership arrangement.
Internet :
1. http://www.tutorialspoint.com/management_concepts.htm
2. Google scholar
3. Wikipedia : free internet dictionary
4. http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Japanese-
Manufacturing-Techniques.html
BRCM COLLEGE OF BUSINESS ADMINISTRATION
LIBRARY ASSIGNMENT-2012-13
PRODUCTION MANAGEMENT-II
SYBBA SEM IV
DIVISION-I
TOPIC: JAPANESE CONTRIBUTION TO PRODUCTION (OPERATION) MANAGEMENT
TOPIC NO 12
BY,
34. KENALEE GANDHI
35. LAY GANDHI
36 .SANI GANDHI
SUBMITTED TO: MR. OJAS DESAI
SUBMITTED ON: 8TH MARCH, 2013