JUST IN TIME APPROACH IN INVENTORY MANAGEMENT

ABSTRACT

Quality improvement and costs control are vital to organizations for work performance enhancement and fulfilling customers’ requirement. Inventories that are stored in large amount of quantities will result in waste and space usage. One effective solution is using Just in Time (JIT) concept as a method to reduce costs, improve quality and meet the ever-changing customer needs. The adoption of Just in Time (JIT) concepts seems to be the most effective way to overcome these circumstances. JIT is management philosophy that emphasizes on eliminating waste and increase productivity. The main purpose of this research is to find out whether the implementation of JIT would reduce the inventories at Electronics component industry especially at the parts producing stamping of FCM. This research is done by case study. Therefore the data collection would be using secondary data which is the documentation from FCM itself and also via observation. The data were analyzed by doing the comparison before and after the implementation of JIT using Microsoft words excel. From the analysis that had been done, the implementation of JIT had increased the inventories management at the stamping parts production. As the conclusion, the implementation of JIT in the inventory management at the parts production stamping at Electronics component industry had successfully reduce the inventories level while improving the inventory level.

Keywords: Stamping Production, Just in Time, inventory management, electronics component industry.

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Supply Chain Inventory Control: A Comparison Among JIT, MRP, and MRP With Information Sharing Using Simulation

Abstract: Logistics or supply chains play a central role in effective management. Inventory control systems play a significant role in managing supply chains. This article provides engineering managers with guidelines to choose a cost-effective supply chain inventory control system through analyzing push inventory systems (MRP), and pull systems (JIT). Simulation modeling was used to build and analyze the supply chains with stationary and cyclical demand patterns. The article indicates the main variables that should concern the engineering manager to choose between MRP and JIT. The paper concludes that because JIT reduces the holding cost, it becomes a more cost-effective system at a wider range as the demand level increases. The results also show that when information is shared across a supply chain that implements a MRP system, the cost reduction is significant in comparison with no information sharing especially under cyclical and highly variable demand patterns.

Keywords: Supply Chain Management, Inventory Control, Just-In-Time, MRP, Simulation.

EMJ Focus Areas: Operations Management, Quantitative Methods & Models

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Scheduling Oriented Improvement of Kanban Card Resupplying In Logistic Systems at Automotive Industry

ABSTRACT

Kanban is a pull production system that is very useful in Automotive Production Industry. Logistic systems in automotive industry, tries to apply the best system of logistic to supply the production lines and stations by bringing the parts and all requirements in best quantity and timing in order to come off the JIT specifications. In this article we try to exert a sequencing concept in Kanban card rotations to minimize the line shortage of parts causes stop in production procedure. Minimizing the Resupplying Cycle Times in production lines lead to less quantity of shortages that’s one important purpose of lean production. We introduce an appropriate sequencing and scheduling objective function related to Kanban card rotations to minimize some criteria affects the line inventories and causes some improvements on probable shortages. To know the weights of each job we used the Shannon’s Entropy method combined with SAW decision making method and we solved the sequencing and scheduling problem with total weighted tardiness objective function, using VNS heuristic method. To show the improvement and positive effects of our method we presented a real world case study and applied our model to a real world case study to observe the improvements in backlogs and tardiness in Kanban resupplying. Finally we presented the achieved improvements.

General Terms Sequencing and scheduling, Shannon’s Entropy, Pull production systems.

Keywords  Kanban, Just-in-Time, Production Systems, Scheduling, WSPT

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Material Requirement Planning in Aircraft Maintenance

ABSTRACT: 

Aviation field always come across a common issue throughout the world while planning their materials in inventory. Cost of maintaining unwanted inventory can hit the revenue of the airline operations. So a near optimal solution is preferred for achieving this. Materials planning can be divided into two models i.e. stochastic and forecasted model. Most of the airlines throughout the world follow stochastic models such as Max-Min, Reorder point (ROP) method, etc. with the aid maintenance software packages widely available in market. It is found that they try to fit the same methodology in almost complex dependent demand products in aviation where demand is discrete. The appropriate method for this scenario i.e. Material Requirement Planning (MRP) is found to be not considered. MRP is nothing but a computerized inventory control and production planning system which helps in scheduling the planned order releases along with appropriate lot sizing.

Keywords: Inventory control, Maintenance, Materials, Material Requirement Planning (MRP), ABC analysis.

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Just-in-Time Production Systems (JITPS) in Developing Countries: The Nigerian Experience

KEYWORDS JIT. Manufacturing Companies. Third World. Nigeria

ABSTRACT 

Despite the immense advantages of the JITPS, its adoption in the third world manufacturing is quite limited. Manufacturing sectors in this part of the world are still run on the basis of old production systems that included so many activities that add little value to the final production process. Production processes are therefore slow, wasteful and characterized by avoidable complexities. This paper examines the extent of JITPS in a typical third world country-Nigeria, with a view to identifying the extent of adoption as well as the hindrances on the part of adopting the technique. Structured questionnaires were administered to companies to indicate whether or not they were adopting the technique. We also elicit information on the nature of JITPS adopted by companies as well as the benefits accrue from adopting the method. The findings include that fairly larger companies adopt JIT method more while the relatively smaller ones are still not aware of the existence of the technique. The paper also identifies structural hindrances to the adoption of JITPS, solutions were also suggested to overcome some of these problems

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Improving Order Quantity Model with Emergency Safety Stock (ESS)

Abstract—This study considers the problem of calculating safety stocks in disaster situations inventory systems that face demand uncertainties. Safety stocks are essential to make the supply chain, which is controlled by forecasts of customer needs, in response to demand uncertainties and to reach predefined goal service levels. To solve the problem of uncertainties due to the disaster situations affecting the industry sector, the concept of Emergency Safety Stock (ESS) was proposed. While there exists a huge body of literature on determining safety stock levels, this literature does not address the problem arising due to the disaster and dealing with the situations. In this paper, the problem of improving the Order Quantity Model to deal with uncertainty of demand due to disasters is managed by incorporating a new idea called ESS which is based on the probability of disaster occurrence and uses probability matrix calculated from the historical data.

Ke ywords—Emergency Safety Stocks, Safety stocks, Order Quantity Model, Supply chain.

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IMPROVEMENT OF PRODUCTION PLANNING IN COMPANY PARS KOMPONENTY

Keywords: the MRP system, production planning, reserve time, stocks

Abstract: The article analyzes the current status of production planning in company Pars Komponenty s.r.o., proposes a new method of planning based on application of the principle of MRP. It is a discrete type of production with high complexity of BOM and MTO (Make-to-Order) and ETO (Engineering-to-Order) from the point of decoupling point. The original planning system plans according to production capacity backward without collisions, but for a given type of production does not work in practice. Planning system was analyzed and the main problems were identified, which were high work in progress and material stocks. This article target is to propose a new planining system based on the inclusion of time reserves of purchased material items. New planning system was tested in practise with benefit in reducing both the material inventory and work in progress.

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FINANCIAL EFFECTS OF INVENTORY MANAGEMENT IN TRADING COMPANIES - EOQ MODEL

Abstract.

Effective financial management of trading companies refers to the constant questioning of the necessity of investing in any form of business assets. Therefore, inventories, which often assume major cash investments, must be carefully monitored and controlled. Special emphasis is placed on the costs arising from their existence. Based on the analysis of the costs associated with acquiring and holding an inventory, commercial companies make different decisions regarding the size of the order and the time of its placement. Application of various models, including the "optimal inventory management" model, can significantly facilitate the decision-making process. The analysis in this paper focuses on the effects of the application of the EOQ model in supplies optimization of the company "XY". The analysis showed that there is an economic motivation to apply this model, since its implementation significantly reduces the inventory costs, which contributes to overall profitability. By applying this model in the case of the trading company “XY”, the total inventory costs would be lower by 1.88%. Ordering costs would be reduced by 30%, the inventory holding costs would increase by 7.45%, but it would significantly reduce investment in inventories.

Key Words: inventory holding costs, costs of ordering, safety stocks, EOQ model.

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THE LEONTIEF´S EQUATION TO IMPROVE THE LEARNING PROCESS OF MRP SYSTEM IN THE TOURISM STUDIES

ABSTRACT

This paper details the development of a simplified MRP through the equation of Leontief (linear algebra), and proposes its teaching in three parts a) data collection and recognition of the relationship between materials, b) a list of variables and mathematics explanation, c) obtaining results and verifying them by software. The academic exercise is about the flow of ingredients required to comply with a plan for food services and is intended to be a learning tool to facilitate the study of this method in the hospitality management courses.

Keywords –– MRP, Leontief equation, Linear Algebra, hospitality

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Analysis of WIP Inventory Control and Simulation of KANBAN System within Wiring Harness Company

Abstract

This project suggests an approximate implementation and simulation of KANBAN system within wiring harness company. The latter adopts Just-in-Time philosophy but without respecting it fully by resorting to push system in controlling its Work In Process (WIP) inventory. That is why, an analysis of the existing system has been conducted in order to shed light on the flaws and deficiencies existing at the level of managing the WIP stock. After detecting the alarming situation of inventory control especially in the pre-assembly area, an initial implementation and simulation of KANBAN system has been suggested using ProModel even if many constraints have been encountered at the level of data and software used.

Keywords KANBAN system, Just-in-Time philosophy, Work In Process inventory, ProModel.

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MINIMISING INVENTORY COSTS BY PROPERLY CHOOSING THE LEVEL OF SAFETY STOCK

ABSTRACT: 

Markets are everyday becoming ever more demanding and companies are adjusting in different ways. The objective of forecasting in a demand-driven supply network is to identify the probable range of expected demand so that supply can cover demand anywhere within the statistical range. Supply can cover the range either through having the capacity to replenish within lead times or by carrying excess inventory (safety stock). Nowadays, many companies put a lot of their energy and finance into setting the right level of safety stock and reducing related expenses. In this paper, we improve an existing method for calculating the safety stock for a particular Slovenian company. We present the existing and proposed methods for calculating safety stock and derive a cost model. Finally, we prove that the proposed method not only reduces average costs but also helps to meet the target customer service level – making it also applicable to other Slovenian companies encountering situations where demand is seasonal.

Keywords: Safety stock; Inventory; Cost model; Optimisation

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Process Improvement and Reorganization of Kanban Inventory in an Industry of Machinery and Equipment: A Case Study

Abstract 

The purpose of this research is the reduction of losses due to excess inventory and unnecessary movement in the Kanban inventory in a multinational industry manufacturer of machinery and equipment, located in the State of São Paulo, Brazil. The justification of this project is based on the concept of Kanban intrinsically linked to minimize fluctuations in stock as a result of this reduction, which is one of the pillars of Kanban philosophy. The goals of the research is to analyze the supply chain, whereas the current process, mapping all storage and mobility of materials in order to detect the amount of pieces in lean process. The methodology is based on the following steps: diagnosis of individual supply chain inputs for the manufacturing and assembling of machines and cranes, data collection of the items in the supplier/manufacturing relation, application of ‘lean production system’ in the reception, distribution, mobility, storage, as well in the mounting sequences.

Keywords Logistics, Lean management, Kanban inventory, Supply chain, Production reorganization

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APPLICATION OF SIX SIGMA TO GEAR BOX MANUFACTURING

Abstract

This study applies Six Sigma to optimize the keyway cutting operation on a shaft of a gear box produced by Horton Automatics Company. Since the operation had not been optimized, many problems had been raised in the assembly of keys with shafts and a considerable number of scrap parts had been produced which deteriorated profitability of the company. The main problem was that the keyway width did not allow keys to be assembled into the shaft tightly. To solve the problem and optimize the process, DMAIC (Define, Measure, Analyze, Improve, and Control) methodology of Six Sigma was applied. In this paper, the steps of DMAIC to optimize the operation are presented and illustrated. In the Define phase, the problem was defined and the specific operation of the manufacturing process was recognized by the PFMEA (Process Failure Mode Effects Analysis) technique. In the Measure phase, the operation was studied and the process capability was measured. In the Analyze phase, the factors that affect the keyway width were identified by a causeand-effect analysis. In the Improve phase, the best combination of the levels of the factors was determined by using the Design of Experiments (DOE) technique and the best combination was applied. Finally, in the Control phase, some recommendations were given in order to keep the process in good condition.

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Six Sigma – A New Direction to Quality and Productivity Management

Abstract - The fast changing economic conditions such as global competition, declining profit margin, customer demand for high quality product, product variety and reduced lead– time etc. had a major impact on manufacturing industries. To respond to these needs various industrial engineering and quality management strategies such as ISO 9000, Total Quality Management, Kaizen, Just–in–time manufacturing, Enterprise Resource Planning, Business Process Reengineering, Lean management etc. have been developed. A new paradigm in this area of manufacturing strategies is Six Sigma. The Six Sigma approach has been increasingly adopted world wide in the manufacturing sector in order to enhance productivity and quality performance and to make the process robust to quality variations.

This paper discusses the quality and productivityimprovement in a manufacturing enterprise through a case study. The paper deals with an application of Six Sigma DMAIC(Define–Measure-Analyze-Improve-Control) methodo -logy in an industry which provides a framework to identify, quantify and eliminate sources of variation in an operational process in question, to optimize the operation variables, improve and sustain performance viz. process yield with wellexecuted control plans. Six Sigma improves the process performance (process yield) of the critical operational process, leading to better utilization of resources, decreases variations & maintains consistent quality of the process output.

.Index Terms – DMAIC, Process yield, Six Sigma, Total Quality Management.

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Improvement of Scrap Request Process with Six Sigma Methodology

Abstract—This paper depicts a project undertaken in a semi-conductor company. The aim of the project was to simplify the scrap request process of electronic controllers of wall hung gas boilers and to reduce its processing time. To achieve this purpose, the Six Sigma methodology was used. This project shows the application of the DMAIC methodology in a non-manufacturing process and assesses its applicability. Through the elimination of problems identified and resolved using Six Sigma methodology, the processing time of scrap request was substantially reduced allowing high costs saving.

Index Terms—DMAIC, Six Sigma, Scrap Process

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Success Factors in Managing Six Sigma Projects

Abstract

Six Sigma is a project-driven business systems improvement method. Successful implementation and growing organizational interest in the Six Sigma method have been exploding in recent years. It is rapidly becoming a major force driving the strategy of numerous successful organizations. Involvement in Six Sigma projects is becoming an important career path requirement in many organizations. Understanding the main concepts of the Six Sigma method provides important opportunities to project professionals to lead Six Sigma projects, and allows them to better support their organizations’ strategic direction, and increasing needs for coaching, mentoring, and training. It has been reported widely that Six Sigma projects are very successful, compared to the reports of dismal success rates in traditional projects and business process reengineering projects.

This paper provides a brief overview of the Six Sigma management method and its use of project management. The paper examines the main factors driving the success of Six Sigma projects. It addresses the elements of strategic selection and effective management of Six Sigma projects. It considers the organizational structure used and the roles of various participants in achieving technical, financial and customer satisfaction objectives of each Six Sigma project. It presents the methodologies used in managing Six Sigma projects for both process improvement and new development projects. It reviews the approach used for evaluating the success of these projects.

The paper summarizes extensive literature reviews and discussions with Six Sigma leaders at several organizations. It analyzes and synthesizes the lessons learned from successful management of Six Sigma projects and their potential applications in managing traditional projects. It considers further improvements to the methodologies used for managing Six Sigma projects, and addresses wider applications of promising practices to organizational change management. The paper also discusses challenges and obstacles in the application of the Six Sigma method.

The promising practices learned from the successful management of Six Sigma projects could have important applications in managing traditional projects and wider applications in managing organizational change. 

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Six Sigma-Based Approach to Improve Performance in Construction Operations

Abstract: Many researchers and project managers have attempted to improve project performance by applying new philosophies such as lean principle, just-in-time, pull scheduling, and last planner. However, very little research has been conducted on setting definite quantitative goals for performance improvement while considering the defect rate involved in the construction operations. This research explores practical solutions for construction performance improvement by applying the six sigma principle. This principle provides the metrics required to establish performance improvement goals and a methodology for measuring and evaluating improvement. The proposed approach is expected to achieve more reliable workflows by reducing process variability to fit in a desirable range—thereby improving the overall performance through the evaluation of the quality level in current construction operations. To verify the suggested methodology, two case studies have been presented and process simulation analyses are performed to observe the performance changes based on the six sigma principle. Critical total quality control, as the sigma level rises, is also discussed.

DOI: 10.1061/ ASCE 0742-597X 2008 24:1 21


CE Database subject headings: Quality control; Simulation; Productivity; Construction management.

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An Application of Customized Lean Six Sigma to Enhance Productivity at a Paper Manufacturing Company

Abstract: This article presents a process improvement study applied at a local paper manufacturing company based on customized Lean Six Sigma methodologies. More specifically, the DMAIC (Define, Measure, Analyze, Improve, and Control) project management methodology and various lean tools are utilized to streamline processes and enhance productivity. Two performance measures namely production rate and Overall Equipment Effectiveness (OEE) are employed to evaluate the performance of the cutting and the printing machines before and after the DMAIC cycle. Obtained results indicate that the production rate increment for printing machines by 5% and for the cutting machines by 10%. Moreover, the OEE for the printing and cutting machines has increased by 21.6% and 48.45% respectively.

Keywords: Six Sigma, DMAIC; Lean manufacturing; Overall Equipment Effectiveness; Paper manufacturing.

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Production Improvement through the application of Six Sigma in Small Scale Industry: ACase Study

Abstract

Small and Medium Sized Enterprises (SMEs) make an important & great contribution to increase the Indian economy at best level and are a focus of improving their efficiency and competitiveness. In this research we discuss the development of a project research to investigate the suitability of Six Sigma as an improvement methodology for Indian SMEs in the Indian manufacturing sector. Large scale industries are producing or manufacturing high quality products with help of Small and Medium Enterprises (SMEs).At this present highly competition market the main focusing of industrial region to target extra efforts to produce best to best high quality products with lowest cost. Six sigma helps to reduce the of product in suitable manner, reduce low wastages for SME of raw materials, provide best quality product for Indian market on time.

Keywords:Six Sigma, Small Scale Industry etc.

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Application of Six Sigma Methodology to Reduce Defects of a Grinding Process

Six Sigma is a data-driven leadership approach using specific tools and methodologies that lead to fact-based decision making. This paper deals with the application of the Six Sigma methodology in reducing defects in a fine grinding process of an automotive company in India. The DMAIC (Define–Measure–Analyse–Improve–Control) approach has been followed here to solve the underlying problem of reducing process variation and improving the process yield. This paper explores how a manufacturing process can use a systematic methodology to move towards world-class quality level. The application of the Six Sigma methodology resulted in reduction of defects in the fine grinding process from 16.6 to 1.19%. The DMAIC methodology has had a significant financial impact on the profitability of the company in terms of reduction in scrap cost, man-hour saving on rework and increased output. A saving of approximately US$2.4 million per annum was reported from this project. Copyright © 2011 John Wiley & Sons, Ltd.

Keywords: Six Sigma; Kappa statistic; process capability evaluation; chi-square test; ANOVA; Taguchi methods

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