JIT & TQM in SCM1

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JIT & TQM IN SUPPLY CHAIN MANAGEMENT

Presenting by:

T.Ayyappa Naidu (m6-07)

B.Naren (m6-13)

B. Siva Prasad (m6-23)


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JIT

Just-in-time' is a management philosophy and

not a technique.

Just In Time (JIT) is a production and inventory

control system in which materials are purchased

and units are produced only as needed to meet

actual customer demand.

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JIT Emphasis

Continuous improvement. Attacking fundamental problems - anything that does not add value to

the product.

Devising systems to identify problems.

Striving for simplicity - simpler systems may be easier to understand,

easier to manage and less likely to go wrong. A product oriented layout - produces less time spent moving of

materials and parts.

Quality control at source - each worker is responsible for the quality oftheir own output.

Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes

Preventative maintenance, Total productive maintenance - ensuringmachinery and equipment functions perfectly when it is required, andcontinually improving it.

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JIT Emphasis

Eliminating waste. There are seven types ofwaste:

waste from overproduction.

waste of waiting time. transportation waste.

processing waste.

inventory waste. waste of motion.

waste from product defects.

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JIT Emphasis Good housekeeping - workplace cleanliness and

organisation. Set-up time reduction - increases flexibility and allows

smaller batches. Ideal batch size is 1item. Multi-processhandling - a multi-skilled workforce has greaterproductivity, flexibility and job satisfaction.

Levelled / mixed production - to smooth the flow ofproducts through the factory.

Kanbans - simple tools to `pull' products and componentsthrough the process.

Jidoka (Autonomation) - providing machines with theautonomous capability to use judgment, so workers can domore useful things than standing watching them work.

Andon (trouble lights) - to signal problems to initiatecorrective action.

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http://www.ifm.eng.cam.ac.uk/dstools/process/kanban.htmlhttp://www.ifm.eng.cam.ac.uk/dstools/process/kanban.html


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JIT & Supply Chain Management- Cont.

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JIT in Supply Chain Evolution

During Stages 3 & 4 JIT principles were widely

used for Inventory Reductions &

Improvements on Supplier Relationships.

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The Elements of Just-in-Time

Waste Reduction

Firms reduce costs & add value by eliminating

waste from the productive system.

Waste encompasses wait times, inventories,

material & people movement, processing steps,

variability, any other non-value-adding activity.

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Just-in-Time Partnerships

Suppliers & customers work to remove waste,

reduce cost, & improve quality & customer service. JIT purchasing includes delivering smaller

quantities, at right time, delivered to the rightlocation, in the right quantities.

Firms develop JIT partnerships with key customers.Mutual dependency & benefits occur among JITpartnerships.

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Just-in-Time Layouts

Move people & materials when & where needed, ASAP.

Group technology (work cells)- process similar parts orcomponents saving duplication of equipment & labor

Work cells are often U-shaped to facilitate easieroperator & material movements.

JIT layouts are very visual (lines of visibility areunobstructed) with operators at one processing centerable to monitor work at another.

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Just-in-Time Inventories

Reduction of inventory levels causes problems to

surface in the organization.

Once problems are detected, they can be solved.

The end result is a smoother running organization

with less inventory investment.

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Just-in-Time Scheduling

Small batch scheduling drives down costs by:

Reducing purchased, WIP, & finished goods inventories Makes the firm more flexible to meet customer demand.

Small production batches are accomplished withthe use ofkanbansa Japanese word for card.

Although for JIT use, Kanbanhas come to mean asignal to order or release material in theproduction system.

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Continuous Improvement (Kaizen)

Continuous approach to reduce process, delivery, &

quality problems, such as machine breakdownproblems, setup problems, & internal quality problems.

Workforce Commitment

Managers must support JIT by providing subordinates

with the skill, tools, time, & other necessary resources

to identify problems & implement solutions.

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Just-in-Time II

An extension of supplier partnerships & vendor-

managed inventories. A suppliers employee is housed in the purchasing

department of the buyers organization, acting as

both buyer & supplier representative. This

employee monitors inventory levels, placespurchase orders, & participates on product design& value analysis teams.

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TQM

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TQM Definition

Total quality management or TQM is an integrativephilosophy of management for continuously improvingthe quality of products and processes.

TQM functions on the premise that the quality ofproducts and processes is the responsibility ofeveryone who is involved with the creation orconsumption of the products or services offered by anorganization.

TQM capitalizes on the involvement of management,workforce, suppliers, and even customers, in order tomeet or exceed customer expectations.

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TQM is an enterprise-wide philosophy,

encompassing suppliers & customers.

The Elements of Total Quality Management Focus on the Customer

Meeting customer expectations applies to

external as well as to internal suppliers &

customers. Workforce Involvement

Top management commitment. New role asfacilitator.

Employee Empowerment - Think out of the box.

Teamwork is the quality circle concept

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Demings Way

1. Create constancy of purpose toimprove product & service.

2. Adopt the new philosophy.

3. Cease dependence on inspectionto improve quality.

4. End the practice of awardingbusiness on the basis of price.

5. Constantly improve theproduction & service system.

6. Institute training on the job.

7. Institute leadership.

8. Drive out fear.

9. Break down barriers betweendepartments.

10.Eliminate slogans & exhortations.

11.Eliminate quotas.

12.Remove barriers to pride of

workmanship.13.Institute program of self-improvement

14.Put everyone to work toaccomplish the transformation

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The Elements of Total Quality Management

The methods for implementing this approach come from the teachings of such

quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum,

Kaoru Ishikawa and Joseph M. Juran.


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Crosbys Way-

Four Absolutes of Quality

1. The definition of quality is conformance to

requirements2. The system of quality is prevention.

3. Performance standard is zero defects.

4. The measure of quality is the price of non

conformance

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Objectives

Stimulate firms to improve Recognize firms for quality

achievements,

Establish guidelines so thatorganizations can evaluate theirimprovement & provide

guidance to others

Categories Measured

1. Leadership2. Strategic planning

3. Customer & market focus

4. Information & analysis

5. Human resource focus

6. Process management

7. Business Results

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Malcolm Baldrige National Quality Award-


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ISO 9000 Eight-Quality Management Principles

1. Customer focus

2. Leadership

3. Involvement of people

4. Process approach5. System approach to management

6. Continual improvement

7. Factual approach to decision making

8. Mutually beneficial supplier relationships

A Supply Chain Quality Management System builtusing the above Eight ISO 9000 principlescanpromote improvement of operation efficiency

and competition advantage. 22

Total Quality Management & Supply Chain


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TQM Tools

Pareto Analysis

Flow Chart Check Sheet

Histogram

Scatter Diagram

SPC Chart Cause-and-Effect

Diagram

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The Tools of TQMFlow Diagrams- Annotated boxes representing process to show the flow ofproducts or customers.

Check Sheets- to determine frequencies for specific problems.

Pareto Charts- for presenting data in an organized fashion, indicating processproblems from most to least severe.

Cause-and-Effect Diagrams (Fishbone or Ishikawa diagrams) used to aid inbrainstorming and isolating the causes of a problem.

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Histograms

A histogram is a chart showing the number of occurrences in

rank order Scatter Diagrams

Scatter diagrams helps us recognize & understand causal

relationships

Statistical Process Control (SPC)

Allows firms to visually monitor process performance, comparethe performance to desired levels or standards, and takecorrective steps quickly before process variability gets out ofcontrol and damages products, services, and customers

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CONCLUSION

In todays world of ever-increasing consumer demand,dense competition, and globalization, companies need to

ensure that an effective quality program is in place.

Consumers are demanding more and more that products

meet high-levels of performance and reliability but at

the same time remain cost-effective.

Total Quality Management (TQM) provides for continuous

improvement through formalized, methodological steps.

In order for TQM to work however, organizational-wide

adoption must take place.

Through training, patience and determination TQM can

transform a mediocre company into a world class

enterprise.26

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JIT & TQM in SCM1

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