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13 CHAPTER 2 LITERATURE REVIEW 2.1 Over view of Just in Time Manufacturing High inventory holdings are commonly identified as poor management (Boute et al., 2004). JIT is depicted as an inventory control technique and the Japanese Auto Industry is recognised as the developer of JIT inventory and management philosophy (Aghazadeh, 2003). It is a systematic approach which minimises inventory by having supplies arrive at production and distribution points only when needed (Lee and Wellan, 1993). Hunglin and Wang (1991) claim that JIT production is a philosophy for reducing work-in-progress (WIP) inventory, it aid process improvement and reduce process variability. It can be seen as a new way of thinking, planning, and performing with respect to manufacturing (Canel et al., 2000). Gyampah and Gargeya (2001) consider JIT manufacturing both as a philosophy and disciplined method of production. Stevenson (1996) defines the term JIT manufacturing as ‘a repetitive production system in which processing and movement of material and goods occurs just as they are needed, usually in small batches’. JIT implementing firms have to produce and deliver finished goods JIT to be sold, sub assemblies JIT to be assembled into finished goods, fabricated parts JIT to go into the subassemblies and purchased materials JIT to be transformed into fabricated parts (Schonberger, 1982a). JIT philosophy is based on the concept of delivering raw materials when needed; producing products when there is a need, improve quality of product. The fundamental objective of JIT is to eliminate all waste from the entire supply chain and to improve product continuously (Ptak, 1987; Frazier et al., 1988, González-R., 2013). The core of the JIT philosophy is CI through the elimination of waste (Chakravorty and Atwater, 1995). Bicheno (1987) defines JIT as to produce instantaneously with perfect quality and minimum waste. JIT in its broader sense is an approach of achieving perfection in a manufacturing company based on the continuously elimination of waste. In the narrow sense, JIT refers to the movement of material at the necessary place at the necessary time (APICS, 1987). It is a disciplined programme for improving overall productivity and reducing waste (Voss, 1988). In a JIT environment quality parts in the right quantity and at the right time are produced,

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Page 1: CHAPTER 2 LITERATURE REVIEW - Shodhgangashodhganga.inflibnet.ac.in/bitstream/10603/36769/12/12_chepter 2.pdf · CHAPTER –2 LITERATURE REVIEW 2.1 Over view of Just in Time Manufacturing

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CHAPTER – 2 LITERATURE REVIEW

2.1 Over view of Just in Time Manufacturing

High inventory holdings are commonly identified as poor management (Boute et

al., 2004). JIT is depicted as an inventory control technique and the Japanese Auto

Industry is recognised as the developer of JIT inventory and management philosophy

(Aghazadeh, 2003). It is a systematic approach which minimises inventory by having

supplies arrive at production and distribution points only when needed (Lee and Wellan,

1993). Hunglin and Wang (1991) claim that JIT production is a philosophy for reducing

work-in-progress (WIP) inventory, it aid process improvement and reduce process

variability. It can be seen as a new way of thinking, planning, and performing with

respect to manufacturing (Canel et al., 2000). Gyampah and Gargeya (2001) consider

JIT manufacturing both as a philosophy and disciplined method of production.

Stevenson (1996) defines the term JIT manufacturing as ‘a repetitive production system

in which processing and movement of material and goods occurs just as they are

needed, usually in small batches’. JIT implementing firms have to produce and deliver

finished goods JIT to be sold, sub assemblies JIT to be assembled into finished goods,

fabricated parts JIT to go into the subassemblies and purchased materials JIT to be

transformed into fabricated parts (Schonberger, 1982a). JIT philosophy is based on the

concept of delivering raw materials when needed; producing products when there is a

need, improve quality of product. The fundamental objective of JIT is to eliminate all

waste from the entire supply chain and to improve product continuously (Ptak, 1987;

Frazier et al., 1988, González-R., 2013).

The core of the JIT philosophy is CI through the elimination of waste

(Chakravorty and Atwater, 1995). Bicheno (1987) defines JIT as “to produce

instantaneously with perfect quality and minimum waste”. JIT in its broader sense is an

approach of achieving perfection in a manufacturing company based on the

continuously elimination of waste. In the narrow sense, JIT refers to the movement of

material at the necessary place at the necessary time (APICS, 1987). It is a disciplined

programme for improving overall productivity and reducing waste (Voss, 1988). In a

JIT environment quality parts in the right quantity and at the right time are produced,

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while using a minimum amount of facilities, machinery and equipment, raw and in-

process materials and human resources (Schlesinger and Heskett, 1991).

According to Potts (1986) and Banerjee and Kim (1995), JIT is a philosophy

directed towards the elimination of waste, where waste is anything which adds cost but

not value to a product. It is a system driven by final product demand where each item is

procured, manufactured, and delivered in the quantities needed JIT to satisfy demand in

the next stage of the supply chain system or in the marketplace (Sadhwani et al., 1985).

Thus, waste is anything associated with the production process that does not add value

to the final product. Thus, waste includes quality defects, inventories of all kinds, time

spent to move material and time spent setting up machines (Demmy and Gordon, 1988).

Toyota Production system has given three broad types of waste and these are shown in

Table 2.1. Munda waste has been given more importance than the other two types of

waste. Munda waste is of seven types and is depicted in Table 2.2.

Table 2.1 Broad classification of Waste

Japanese nomenclature English Meaning

1. Muda

2. Mura

3. Muri

Unproductive

Unevenness

Overburden

Younus (1991) in his research work has identified 12 types of wastes: handling,

movement, over-production, scrap and rework, idle time, setup times, transportation the

process itself, material or sub-assemblies, rework, improper order and arrangement,

miscommunication. This waste is any form is required to be eliminated. The elimination

of waste is achieved through internal elements (manufacturing systems, human

resources) and external elements (suppliers, other organizations with close relationships

with the manufacturer) (Keller and Kozazi, 1993). Chauhan and Singh (2012) have

emphasized that ‘elimination of waste’ is the most important parameter of lean

manufacturing, followed by ‘just in time deliveries’. Wallace (1990) has considered JIT

as a path to attain excellence in a manufacturing company based on continuing

elimination of waste and constant development in productivity.

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Table 2.2 Types of Munda Waste

Abbreviation

of waste

Name of

waste

Impact on performance of an Organization by

eliminating waste

T Transportation Establish layout to minimize transport and handling.

I Inventory Reduce the waste of stocks in all production areas

(raw material, work in progress, finished goods).

M Motion Study motion for improved economics, productivity

and quality.

W Wait Synchronize work flow and balance loads through

flexible workers and equipment.

O Over-

processing

Use value analysis production. Processing may be

totally or partially unnecessary and capable of being

eliminated.

O Over-

production

Reduce set-up time, compact layout and improve shop

floor visibility

D Defects Build in processes to eliminate defects in the process.

Continuous monitoring of production processes with the goal of eliminating all

forms of waste is a key point in understanding JIT. JIT can be depicted as an operating

concept designed to eliminate waste (Chase et al., 1998; Hernandez, 1989). The

American Production and Inventory Control Society (APICS, 1987) define JIT as: ‘a

philosophy of manufacturing excellence based on pursuit of the planned elimination of

all waste and consistent improvement of productivety’. It encompasses the successful

execution of all manufacturing activities required to produce a final product from design

engineering to delivery and including all stages from conversion of raw material

onward. The elimination of waste using JIT foundation element ‘5S’ principle has been

shown in Figure 2.1.

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Figure 2.1 Elimination of waste using 5S

Ehrhardt (1997) has considered JIT as a pull system, in which a production

process pulls material from a prior process (which does not operate unless there is need

for its output) in support of the final assembly schedule, which is closely coordinate

with customer demand. A common example of pull production system that is used in

industries is Kanban system. JIT is the classic pull system (Mahapatra et al., 2012). The

basic fundamental is that production at one level only happens when request is initiated

at the higher level. Other pull systems other than Kanban system given by Hyer and

Wemmerlov (2002) are paired-cell overlapping loops of cards with authorisation

(POLCA), constant work-in-progress (CONWIP) and drum-buffer-rope (DBR). Figure

2.2 explains pull strategies.

Figure 2.2 Pull Strategies

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On the other hand, a push system supports batch manufacturing operations. In

batch manufacturing, a schedule prepared by taking into consideration the lead times of

various components and subassemblies is released by the material-planning department

of an organization (Vollmann et al., 1997). Estimating release lead-times, modeling

future requirements for different products, determining the safety lead-times and stock

have been identified as the key issues identified by Krishnamurthy et al. (2004) in

modeling a push system. Push system is also known as material requirement planning

(MRP). Various push strategies are shown in Figure 2.3.

Figure 2.3 Push Strategies

JIT is a management philosophy or toolbox of techniques based on making a

significant improvement in operating efficiency through reduced inventory levels, lead

times and overheads (Grahame, 1998). JIT is essentially more of a philosophy, than a

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series of techniques, the basic aim of which is to reduce cost by restricting the

commitment to expenditure in any form, including manufacturing or ordering materials,

components, etc. (Sohal et al., 1989). Heeley (1991) considers JIT as a state of mind for

achieving competitive excellence by creating an attention to CI through 100%

involvement to eliminate all waste, institutionalising only value adding activities with

100%.

2.2 Need of JIT in contemporary manufacturing scenario

Reference literature has revealed that the manufacturing organizations

worldwide are facing many challenges to achieve successful operation in today’s

competitive environment. Many organizations are using different techniques to reduce

their cost of production so that they can compete with others. The objectives of JIT are

to remove waste and to enhance the flow of materials. Once this is accomplished, costs

can be lowered, quality enhanced and the firm becomes more flexible and achieves its

inherent objective of realization of manufacturing competitiveness (Fuller, 1995).

The typical topics covered under JIT include the system’s operating procedures

and characteristics, implementation strategies, and benefits (theoretical and actual) such

as efficiency improvements, cost savings, quality improvements, and modifications of

the supplier/producer relationship. On the whole, they present JIT from a perspective

that has an economic focus (Peters and Austin, 1995).

The JIT system is driven by final product demand, where each item is procured,

manufactured, and delivered in the quantities needed JIT to satisfy demand in the next

stage of the supply chain system or in the marketplace (Sadhwani et al., 1985). It is

widely accepted that the implementation of JIT can improve firm performance.

Schonberger (1986) provides anecdotal evidence that companies have substantially cut

lead times, drastically reduced raw material, work-in-process, and finished goods

inventories, and effectively increased asset turnover. Implementation of JIT in an

industrial organization is based on two principles, elimination of waste, and utilisation

of men, machine and material to its optimum levels.

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Table 2.3 Effect of JIT implementation on various factors

Factors

Facilitating JIT

Effect of JIT Implementation

Process

Elimination of waste

Reduction in waste

Reduce lot size

Reduce lead-time

Automation

Kanban

Production strategy

Reduced set-up times

Stable production

Preventive maintenance

TPM

Kaizen

Group technology

Quality control and

improvement

Continuous quality improvement

Halt production line

Statistical process control

TQM

Quality circles

Management Management commitment

Management participation and

commitment

Increase workers’ morale

Reduction in labor turnover

Incentive to worker

Job security

Workers

Workers commitment

Employee suggestions

Flexibility of employee

Long working hours

Suppliers Vendor/supplier

participation

Quality parts

Reliable and prompt deliveries

Small lot size

Communication with suppliers

Long-term contract

Supplier training

Single source supplier

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Figure 2.4 Need of JIT

The following factors necessitate implementation of JIT in the contemporary

manufacturing scenario:

• Need to remain competitive globally.

• Satisfy global customers.

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• Eliminate threats faced by organization from tough competition, increase of raw

material costs, energy costs and globalization.

• Improve the work culture and mindset of organization to increase the efficiency

of the workers by providing them training, incentive and to make each worker

multi-skilled.

• Improve the quality of product.

• Reduce the cost of product.

• Ensure that minimum breakdowns should occur in the industrial organization.

• Ensure that each part is to be procured or produced as and when required so as to

reduce waste.

• Reduce inventory levels and lead time in an industrial organization to minimum.

• Optimum utilisation of men, machine and material.

There are many factors that facilitate JIT manufacturing and the effect of these

factors on JIT implementation is depicted in Table 2.3. The need for JIT in an

organization is highlighted in Figure 2.4. From the figure, it is clear that globalisation

leads to competition in an organization. To meet this competition organizations use

modern techniques of manufacturing. According to Maskell (1987), the world of

manufacturing is changing so fast that there seems to be a new buzzword every day and

a new concept every couple of weeks. There are some factors that facilitate JIT and

ultimately organization reaps the benefits of JIT.

2.3 Relationship of JIT with other manufacturing practices

JIT production is called by many names like Minimum inventory production

system, Zero inventory production system, Kanban production, Kaizen production,

stockless production, pull through production, and quick response inventory system

(Biggart and Gargeya, 2002). It is system that produces the required items at the time

and in the quantities needed (Gunasekaran and Lyu, 1997). The main aim of JIT is to

produce the parts used for subassemblies JIT, to assemble these parts into subassemblies

JIT, to bring together these subassemblies to form assemblies JIT and ultimately deliver

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finished goods JIT, so as to eliminate waste, to maintain quality and to satisfy

customers. The achievement of all these goals is possible if JIT is implemented along

with the other manufacturing techniques. There are a number of manufacturing

techniques and philosophies used by the organizations. The adoption of philosophies

such as JIT, TQM, benchmarking (BM), business process reengineering (BPR) and CI

has in most cases led to operational and strategic gains for manufacturing and service

organizations in particular (Yasin et al., 2004b).

JIT is a backbone of lean manufacturing system (Dabee et al., 2013). For long

people associated JIT only with the process of manufacturing, but in actual practice JIT

consists of JIT purchasing, JIT manufactures and JIT selling. Ahuja and Khamba (2008)

have depicted a direct relationship between JIT and lean manufacturing philosophies

(Figure 2.5). From this figure, it is also clear that JIT plays a vital role in lean

manufacturing. The relationship of JIT with other manufacturing philosophies or

practices is also depicted in Figure 2.5.

Figure 2.5 Relationship between JIT and lean manufacturing

Enormous attention has been given to JIT and TQM by many organizations all

over the world to improve their competitiveness. Vuppalapati et al. (1995) discussed

relationship of JIT with TQM. The connections between JIT and TQM from conceptual,

philosophical, and implementation perspectives are examined. It is summarised that

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implementing both JIT and TQM jointly outperform the organizations that have

implemented only one of these, or none. Figure 2.6 has explained three views about JIT

and TQM implementation.

Figure 2.6 Three views of JIT-TQM implementation

Venkatesh et al. (2007) have discussed relationship between three letters

syndrome for revitalising manufacturing. The three letter syndromes in manufacturing

are mentioned as JIT, TQM, total productive maintenance (TPM), supply chain

management (SCM) and theory of constraints (TOC). The relationship between above

mentioned manufacturing techniques with performance of manufacturing has been

presented in the study. The theoretical framework of relationship of these techniques has

been depicted in Figure 2.7.

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Figure 2.7 Theoretical framework

There are some TQM related JIT practices and these are total quality control,

quality circles, value analysis, integrated product and process design, total productive

and preventive maintenance, workplace organization plan (Sandanayaka et al., 2008).

JIT is also associated with Kanban. Kanban is another name of JIT material flow

system. It is a pull based system. Flow of material in an industrial organization is

classified into two types, push and pull systems. The Kanban system is typical pull

system while most conventional systems are push systems (Karmarkar, 1989). The basic

difference between pull and push is that a pull system initiates production as a reaction

to current demand, where as push system initiates production in response to expected,

forecasted, future demand.

Danese et al (2012) in their research work developed six hypotheses on the

relationships between JIT production, JIT supply, efficiency and delivery performance.

Authors concluded that JIT production practices have positively affected both efficiency

and delivery. JIT supply practices positively moderate the relationship between JIT

production and delivery, while there is no significant moderating effect when

considering the impact on efficiency.

Chen and Tan (2013) have shown that organization ownership not only impacts

the implementation of JIT and operations performance, but also impacts the relationship

between JIT implementation and operations performance.

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• Moreover, the results revealed that, for firms operating in China, the

implementation frequency of JIT practices varies with organization

ownerships.

• The foreign and joint venture firms (JVFs) were found to have a higher

level of JIT implementation and can also achieve better performance

from JIT implementation than state-owned and private-owned firms

(POF).

• Also, JIT implementation was found to have a significantly positive

relationship with operations performance in all types of ownership firms.

Singh et al. (1990) have discussed a case study about implementation of Kanban

system. The lead-time between the entries of the parts to the completion of the assembly

operation was reduced because the materials would not be delivered to the usage area

until they were needed. From the above studies, it is clear that JIT bears a direct or

indirect relationship with other manufacturing practices. If JIT is implemented with the

other manufacturing practices results are much better that applying JIT alone in the

industrial organization.

2.4 Prerequisites for JIT

There are four major areas to be looked after for the implementation of JIT

successfully and these are inventory, production, quality and customer’s relation.

Schermerhorn (1996) has put forth the theory that the effectiveness of JIT

implementation hinges on a wide range of special support that includes: high quality

supplies, strong management commitment, a manageable supplier network, geographic

concentration, efficient transportation, and materials handling.

Before a manufacturing or service organization can enjoy the fruits of JIT, the firm must

accept JIT as an organisational philosophy. This may require the organization to change

or modify its operating procedures, its production or service systems and in most cases

its organisational culture (Yasin et al., 2004a). Figure 2.8 explains the modifications in

an organization prior to JIT implementation.

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Figure 2.8 Organizational modifications prior to JIT implementation

Main aim of JIT manufacturing is to reduce inventories. Maskell (1987)

mentioned four types of inventory procurement problems and their solution in Table 2.4.

Table 2.4 Inventory procurement problems and their solutions

Problem Solution

Supplier lead times Closer supplier relationships

Inflexible production planning Closed-loop MRP-II system

Large batch sizes Reduced set-up time

Long queue times Plant layout and MRP-II

Cooperation of supplier is a vital first step for inventory control. Industrial

organization can reap benefits of JIT if suppliers give industrial organization shorter

lead times, deliver smaller quantities more often, guarantee a low reject rate and

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perform quality-assurance inspection at source. More frequent deliveries of smaller

quantities of material supplied by supplier should be such that each delivery should be

just enough to meet organisation’s immediate production schedule to keep inventory as

low as possible. It is often thought that component manufacturers who supply on a JIT

basis must be located in close proximity, and certainly within the same customs region,

as the end-product manufacturer (Rooks, 1989).

Peters and Austin (1995) are of the view that JIT suppliers are partners with the

JIT firm. The relationships between the firm and its suppliers are expected to be long-

term. Since the supplier is a vertical extension of the JIT firm’s operations system, the

stake in the JIT firm increases for this stakeholder group. To develop and support

relationships of this intensity, it is usually necessary for JIT firms to reduce their

supplier bases.

JIT production requires high quality, small lot sizes, and frequent delivery of raw

materials. A good relationship with suppliers is crucial to achieve these requirements.

For example, the Japanese make their vendors seem like the next level below the start of

production (Zhu and Meredith, 1995). It is clear that if any industrial organization has to

apply JIT then they have to improve their relations with suppliers/vendors so that they

can get their raw material inventories well in time.

Another factor that needs attention prior to implementation of JIT is production

and quality control. To improve the production and to control quality most important

factor in the implementation of JIT is culture. The culture is further sub divided into two

parts, i.e., workers culture and management’s culture. The workers should be totally

committed to their work and company. They should be ready to work for long hours if

needed, loyal to their organization, cooperative, flexible. The management should also

be loyal to their workers, provide them training, give incentives, job security, and

involve them in decision making.

Ramarapu et al. (1995) have emphasised that success of JIT in Japan is due to

the culture of their workers and management. Workers in Japan are loyal, cooperative,

flexible and willing to work long hours whenever there is need. Management of Japan is

also characterised by life-time employment, approaching decision making from the

bottom-up, respect for their workers, and a paternalistic approach towards workers. This

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distinction between workers and managers has helped Japanese management implement

JIT successfully.

Process improvement and maintenance of equipments are also required before

implementation of JIT. For successful implementation of JIT, equipment of the

industrial organization should be well maintained and function properly. For this

industrial organization should have to use latest manufacturing techniques and improve

the process regularly. Duclos et al. (1995) described that as part of JIT implementation,

organizations must instill the habit of expecting continuous small improvements in the

process. CI or Kaizen indicates that there is no best, there is only better. The concept of

CI involves a change in attitude towards the overall effectiveness of an organization.

The purpose is to develop everyone’s attitude in doing the simple things correctly with

gradual improvement (Chandra and Kodali, 1998).

One of the manufacturing techniques that are to be used for the improvement of

equipment efficiency is TPM. TPM is a maintenance management programme with the

objective of eliminating equipment downtime. TPM is an innovative approach to plant

maintenance that is complementary to TQM, JIT manufacturing, total employee

involvement (TEI), continuous performance improvement (CPI), and other world-class

manufacturing strategies (Schonberger, 1986) There are some conditions to implement

the JIT system with success, and these are uniform production rate (to ensure schedule

stability), a pull control system, small lot sizes, quick and economic setups, high quality

levels, preventive maintenance, supplier long-range relationships, etc. These conditions

are called the JIT elements and are presented by several authors, among which are

Gargeya and Thompson (1994), Zhu and Meredith (1995), Spencer and Guide (1995),

and Ramarapu et al. (1995).

Implementation of quality control techniques in an organization can also lead to

realisation of intangible benefits in the form of improved image of the organization,

leading to the possibility of increased orders. For the maintenance of quality, TQM is

used nowadays. TQM, in its simplest form, encompasses all actions, values and beliefs

of an organization which aim to improve and maintain quality standards. Maintaining

and improving quality is an integral part of JIT (Chandra and Kodali, 1998). Customer’s

relation also plays a vital role in implementation of JIT. Holweg and Pil (2004)

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emphasize the importance of build-to-order strategies to enable responsiveness to

customer demand. The principles and philosophies of JIT are depicted in Figure 2.9.

Figure 2.9 Principals and philosophies of JIT

2.5 JIT strategies

Since JIT is a philosophy of management whose objective is complete

elimination of waste from a productive system, it is adaptable to any productive system

– a transportation system, an administrative system, or a manufacturing system

(Daugherty and Sprencer, 1990). JIT production system is based on principles of

elimination of waste, improvement of quality, participation of workers with positive

attitude, attitude of management towards worker and relationship with vendors and

customers. Need of JIT is to eliminate or to reduce all kind of inventories whether it is

raw material, work in process or finished goods inventories. Ohno (1982) identifies

seven types of waste and recommends methods for their elimination; over-production:

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reduce setup time, compact layout and improve shop floor visibility; waiting:

synchronise work flow and balance loads through flexible workers and equipment;

transportation: establish layout to minimise transport and handling; processing: use

value analysis production; processing may be totally or partially unnecessary and

capable of being eliminated; storage: reduce the waste of stocks in all production areas

(raw material, WIP, finished goods); motion: study motion for improved economics,

productivity and quality; making defective products: build in processes to eliminate

defects in the process. JIT has three main goals, elimination or reduction of all kind of

inventory, exposing process inefficiencies in manufacturing process and

reducing/elimination of these inefficiencies by using latest manufacturing techniques.

From Figure 2.10, it is clear that JIT strategies are having three broad aspects, i.e., JIT

purchasing, JIT production and JIT sales.

Figure 2.10 Strategies of JIT

2.5.1 JIT purchasing

The JIT concept as applied to purchasing translates into frequent releases and

deliveries (Schonberger and Gilbert, 1983). So JIT purchasing requires frequent, reliable

deliveries in exact quantities (Gupta, 1990). In today’s competitive markets, close

cooperation between the vendor and the buyer is necessary to reduce the joint inventory

cost and the response time of the vendor-buyer system (Yang et al., 2007). Lorefice

(1998) stressed that a sort of partnership has to be established among supplier and

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customer in order to involve the latter into the efficient process of JIT. Most relevant

factors for the selection of suppliers are not price but to eliminate defective goods from

production cycle and improved quality turn outs. The selection of supplier should be

based on the criteria such that there should be minimum waste, minimum inspection,

minimum freight costs (with geographic proximity), minimum paperwork and small and

frequent lot size delivery. Despite the importance of frequent small lot deliveries from

nearby suppliers, the quality assurance became the most important prerequisite to

establish a relationship with a company that works JIT. Company working with JIT

should also pursue the ‘one supplier per product’ objective. To assure a close

relationship with the upstream partner, the company has to be able to open its doors to

the new link of the production chain (Lorefice, 1998).

Schonberger and Gilbert (1983) are of the opinion that the supplying plant does

not need to carry much buffer stock unless they sell capacity to other plants, in which

case buffer stocks would be necessary to maintain JIT deliveries and therefore, JIT

purchasing works best if the vendor supplies to one customer.

Shin et al. (2000) listed the various criteria to evaluate performance of supplier:

these include lead times, on-time delivery, delivery reliability, quality, and cost.

Giuniperio et al. (2005) in Figure 2.12 has suggested measures of JIT purchasing

practices.

JIT suppliers are considered ally with the JIT firm (Wong and Johansen, 2006).

The association between the firm and its suppliers are supposed to be long-term. Since

the supplier is a vertical extension of the JIT firm’s operations system, the stake in the

JIT firm increases for this stakeholder group. To develop and support relationships of

this intensity, it is usually necessary for JIT firms to reduce their supplier bases. In the

extreme case, single sourcing may be used (Peters and Austin, 1995).

Ansari and Modarress (1988) list the following activities as major JIT

purchasing practices: small purchase lot sizes delivered in definite quantities compared

to traditional large batch delivery; few suppliers, ideally one per component or family of

parts rather than multi-sourcing; selection of suppliers and their evaluation is based on

quality and delivery performance as well as price; quality inspections are performed at

the supplier’s location instead of traditional method of incoming inspection; more

freedom is given to supplier to design specifications; no annual rebidding compared to

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traditional frequent retendering; packaging is changed to encompass standard

containers; paperwork reduces and becomes more informal. The JIT purchasing

strategies are listed in Figure 2.11.

Figure 2.11 JIT purchasing strategies

Aslı and Nursel (2011) are of opinion that supplier selection and supplier

performance evaluation are necessary tools for successful JIT implementation.

Figure 2.12 Measures of JIT purchasing practices

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2.5.2 JIT production

In a JIT production system, earliness and tardiness must be discouraged as early

finished jobs increase inventory cost while late jobs lead to customers’ dissatisfaction

and loss of business goodwill (Wong et al., 2006). Customers need products of good

quality at right time. To produce product of quality, latest manufacturing techniques are

used. There are three main factors that contribute to JIT production: workers,

management, and process.

2.5.2.1 Workers

The main aim of JIT is to reduce waste and eliminate inventories throughout the

process. Peters and Austin (1995) pointed out that reduction of buffer inventory between

process stages means that closer integration and synchronization are required. Due to

this reduction in inventories without compromising with quality an operator’s latitude

and freedom are reduced, creativity and motivation may in turn also be reduced. So the

operators are helped to achieve reductions in waste and cost by enhancing their skills

and each worker should be allowed to participate in the production/service process.

Thus, the workers get an opportunity to make suggestions, propose improvements, and

receive awards (Monden, 1993).

A very high quality standard is required for all materials for JIT to function

properly. One programme that is used to attain and maintain high quality is self-

stopping. Operators have the responsibility to stop their operation if they feel that there

is a condition that adversely affects product quality. Before restarting the system, the

affected operators and managers are expected to identify the root cause of the problem

and take corrective action (Peters and Austin, 1995). Worker has to perform many

duties at a time for the success of JIT. Peters and Austin (1995) listed following

additional duties to be performed by the worker/operator: performing several different

jobs; maintaining production and inventory control; inspecting their own work;

reworking of their own non-conforming (defective) parts; setting up production

equipment; executing preventive and light maintenance of their production equipment;

receiving or giving training both on and off the job.

In a JIT environment, if machine is operated just for eliminating of idle men or

machine, considered as waste. Nothing can be produced until there is a need from the

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downstream operation. So the idle workers are kept busy by running several machines,

since each worker is trained to operate multiple machines and to perform multiple jobs

(Zhu and Meredith, 1995). To achieve all these goals cross-training of worker is very

essential. According to Zhu and Meredith (1995), cross-training is necessary when

workers are encouraged to operate multiple machines. Cross-training operationalise the

idea of job enrichment that brings more responsibility in quality of products to a person

who is producing them. Consequently, quality can be improved as a worker gets more

involved in a production process.

2.4.2.2 Management

As the operators take on more responsibilities, managers must relinquish some

of their traditional responsibilities. The operations manager becomes more of a coach

and adviser to the operators or their teams (Peters and Austin 1995). Evans et al. (1990)

suggest that JIT implementation be initiated from the top, with full support of all

managerial levels. Since implementing JIT pushes a lot of changes to be taken place in

an organizational structure, it is very important to understand that the change may

require people to think and view things in a totally different way. Training should

concentrate on basic understanding of the technical aspects of JIT and the impact that

JIT has got on the operating environment. JIT implementation cannot be successful

without top management commitment. Management must be willing to devote the

resources which are necessary to support an implementation such as JIT education and

training (Zhu and Meredith, 1995). Chong et al. (2001) mentioned various types of

organizational support: top management support for successful JIT implementation;

middle management support; first line supervisor support. According to Chandra and

Kodali (1998), the management commitment to a JIT manufacturing system must start

from the top-most level in management and flow down through all levels of the

company. Top management should act as shapers and coaches. It must support the

workforce by eliminating obstacles to progress.

2.5.2.3 Process/production

For the success of JIT process/production strategies also plays an important role.

According to Davy et al. (1992), JIT production includes following factors: focused

factory; reduced setup times; group technology; total preventive maintenance; uniform

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workloads; Kanban; total quality control; quality circles. The key factors that improve

process/production while implementing JIT are discussed below.

2.5.2.4 Focused factory

The focused factory is a grouping together of operations to achieve a specific

goal and is appropriate for manufacturing of several distinct products. Manufacturing

operations are combined into a series of mini factories, where lead times, setup times,

cycle times, inventory and manufacturing wastes are significantly reduced (Chandra and

Kodali, 1998).

2.5.2.5 Kaizen

Kaizen indicates that there is no best, there is only better. The concept of Kaizen

involves a change in attitude towards the overall effectiveness of an organization. The

purpose is to develop everyone’s attitude in doing the simple things correctly with

gradual improvement (Chandra and Kodali, 1998). Kaizen was changed to gaichu

Kanban (the process where production is only executed on receipt of an order) in 1960.

The meaning of ‘gaichu’ is ‘order’, and ‘Kanban’ means the written instructions for

parts which are sent from a post-process to a pre-process or a parts supplier, when a part

is required (Kaneko and Nojiri, 2008).

2.5.2.6 Group technology

Group technology is an engineering and manufacturing philosophy which

identifies the sameness of parts, equipment or processes. For the purpose of

manufacturing and design, similar parts are identified and grouped by it. Various

machines are grouped according to the routing required for a family of parts rather than

by their functions (Bennett, 1986; Burbidge, 1989). Group technology was first

discussed by Flanders (1925). Since then, it has been extensively used and developed in

the former USSR, followed by Europe and Japan (Huang and Houck, 1985). According

to Chase and Aquilano (1992), group technology is a technique of grouping machines

which perform different tasks together into one work cell so that these tasks can be

performed without moving a large number of work-in-process inventories between

departments. This scale measures the use of manufacturing cells, machine and process

layout, and the use of equipment designed for flexible floor layout. The shop-floor

layout must allow streamlined flow of production, and manufacturing cells and group

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technology are utilised to help the materials and parts move fast from one work centre to

the next. One of the applications of group technology is cellular manufacturing.

2.4.2.7 Cellular manufacturing

According to Ballahur and Steudel (1987), ideally, a cell is a group of dissimilar

machines physically located in close proximity such that a part is processed from start to

finish in a single or continuous flow. Cellular manufacturing is one of the best

techniques with which to implement JIT systems and total quality control (Dicasali,

1986; Welke and Overbecke, 1988). So the aim of cellular manufacturing is to reduce

setup and wait times and enhance the flexibility of the manufacturing environment

(Welke and Overbecker, 1988).

2.4.2.8 Total productive maintenance

Preventive maintenance is needed to provide a smooth production flow.

Maintenance and minor repairs are considered a part of line workers’ job requirements

Zhu and Meredith (1995). An organization without preventive maintenance operates

heavily under the risk of facing accidents, safety problems, substantial repair costs and

out-of-control manufacturing processes. Preventive maintenance is not solely the

responsibility of one individual department. Effective maintenance policies such as

preventive maintenance, TPM, etc., are implemented and practiced by a significant

number of manufacturing industries (Chandra and Kodali, 1998). TPM is a unique

Japanese philosophy, which has been developed based on the Productive Maintenance

concepts and methodologies. This concept was first introduced by M/s Nippon Denso

Co. Ltd. of Japan, a supplier of M/s Toyota Motor Company, Japan in the year 1971.

TPM is an innovative approach of maintenance that promotes autonomous maintenance

by operators and optimizes equipment effectiveness, eliminates breakdowns (Bhadury,

2000). TPM is a manufacturing programme designed primarily to maximise equipment

effectiveness throughout its entire life through the participation and motivation of the

entire work force (Venkatesh et al., 2007).

2.5.2.9 Automation

The organization must have a systematic integrated automation strategy and

invest in modifying process layout accordingly (Yasin and Wafa, 1996).

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2.5.2.10 Heijunka (smooth build up rate)

Heijunka means the rate of production should be as smooth as possible. JIT

systems often try to smooth the build-up rate over a stipulated period. To achieve this,

JIT systems often resort to under-capacity scheduling, so that they could respond to

demand changes by essentially smoothing production, and by holding down to

minimum deviations from the schedule (Chandra and Kodali, 1998).

2.5.2.11 Reduced setup time

Setup time is the down-time of an operation to change from one part or product

to another. Reduction of setup time entails reduction in lead time, which in turn enables

the company to be more responsive to market changes and customer needs (Chandra

and Kodali, 1998). By reducing setup time, smaller run quantities become economically

feasible, manufacturing lead times fall, lead times variability is reduced, quality is

improved, and shop floor flexibility is greatly enhanced. Through the setup reduction,

capacity that is previously consumed by setups can be freed up and made available for

production.

2.5.2.12 Push system

Push systems are projections of schedule based demand, i.e., what is expected to

be? Based on historical information (updated on a week or monthly basis) a detailed

sub-schedule for buying materials and producing goods are initiated. It is this schedule

what pushes the production in order to comply with the expected demand (Lorefice,

1998). In a push system multi-period schedule of future demands for the company’s

products (called a master production schedule) is prepared. The computer breaks that

schedule down into detailed schedules for making or buying component parts. It is a

push system in that the schedule pushed production into making the required parts and

then pushing the parts out and onward. The name given to this push system is MRP

(Schonberger, 1982a). Singh et al. (1990) explained that a weakness of MRP is that

there is some guesswork involved. One need to guess what customer demand would be

in order to prepare the schedule. Thus, bad guesses would result in excess inventory of

some parts.

2.5.2.13 Pull system

In a pull system, the production of a certain product starts on the demand or

request made by the buyer. The consumer of the product is the one that pulls from the

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last link of the production chain, this last link pulls its preceding and so on (Lorefice,

1998). Where companies employ traditional push systems (e.g., Compaq and Hewlett-

Packard) financial risk increases because inventory value inputs, WIP, and final goods

inventories frequently lose value with each day they are held due to decreasing product

lifecycles and a positive cash-to-cash cycle (customers pay for products when they take

possession). Companies that utilise push-based systems frequently attempt to minimise

risk by postponing final product assembly until products reach local distributors who are

responsible for final product configurations (Papadakis, 2003). As stated by Kimura and

Terada (1981): ‘In the pull system, there is certain amount of inventory at each process.

The succeeding process orders and withdraws the parts from the preceding process only

at the rate and at the moment it has consumed all the parts. The preceding process then

only produced on the parts withdrawn by the succeeding process.’

2.5.2.14 Kanban system

Husseini et al. (2006) consider Kanban as a main tool for production control in a

JIT system. The word ‘Kanban’ when translated into English means signal. It is usually

a card or tag accompanying work-in-process parts. In Kanban system parts, components

are supplied continuously so that worker should get what they need, when they need,

where they need and how much they need. There are two types of Kanbans, which are

used as a tool in the JIT production system. The ‘withdrawal Kanban’ is used to indicate

the type and amount of product which the next process should withdraw from the

preceding process. The ‘production ordering Kanban’ specifies the type and quantity of

product which the current process must produce (Chandra and Kodali, 1998). Kanban is

a pull based system. Parts/components are supplied when there is demand (Aghajani et

al., 2012). Number of parts/components that are manufactured depends on customer’s

demand, in other words number of cards received by manufacturer. In Kanban system,

parts/components are not produced until the manufacturer receives card. Kanban is a

control mechanism that links production activities and transmitted demand information

from final product buffers to the preceding workstation by using Kanban cards (Al-

Tahat and Mukattas, 2006). Figure 2.13 given by Al-Tahat and Mukattas (2006)

explains how circulation of information takes place in a single-stage single-product

Kanban-controlled production line.

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Note: Withdrawal and supplier Kanban circulate as shown by the solid line, production

Kanban circulates as shown by the dotted line, and WIP flows as shown by the dashed

line

Figure 2.13 Circulation of information in a single-stage single-product Kanban-

controlled production line

Pisuchpen (2012) has investigated the effect of varying number of kanban cards,

mean inter-arrival time of demand, and locations of the bottlenecks on the performance

integration of JIT flexible manufacturing, assembly and disassembly systems using

multivariate analysis of variance (MANOVA). The study emphasized the interactions

between the variables and their effects on system performance for improving

performance processes. The research highlighted that minimized WIP can be obtained

by higher percentage average fill rate, lower WIP, small average part cycles times, and

increasing in kanban cards while simultaneously retaining full customer satisfaction.

2.5.2.15 Total quality management

While, undoubtedly, a principal function of the quality control department is to

ensure that the level of defects of parts leaving the shop floor falls within specified

levels, the more important objective is to be able to detect the defects at source as soon

as they arise (Lee and Seah, 1987). TQM is a manufacturing programme aimed at

continuously improving and sustaining quality products and processes by capitalising on

the involvement of management, workforce, suppliers, and customers, in order to meet

or exceed customer expectations (Venkatesh et al., 2007). TQM, in its simplest form,

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encompasses all actions, values and beliefs of an organization which aim to improve and

maintain quality standards. Maintaining and improving quality is an integral part of JIT

(Chandra and Kodali, 1998).

2.5.3 Customers

Buyer-seller linkage is critical to successful execution of this JIT marketing

strategy (Kenneth et al., 2011). Customers want to purchase quality products at fair

prices and have those products delivered in a timely manner (Peters and Austin, 1995)

and the overriding purpose of strengthening relationships with customers is to more

effectively respond to changes in customer demand (Green and Inman, 2006).

Claycomb et al. (1999a) define JIT-with-customers as ‘the use of the integrated,

problem-solving initiatives of a JIT philosophy concentrating on improving quality and

facilitating timeliness in supply and distribution to external customers’.

2.6 Elements of JIT

After going through literature, many author suggested different elements of JIT

some of these are discussed below.

Ramarapu et al. (1995) have grouped elements of JIT in five broader critical

factors: elimination of waste; production strategy; quality control and quality

improvement; management commitment and employee participation; and

vendor/supplier participation. The elements of JIT discussed by various authors are

depicted in Table 2.5.

Table 2.5 Elements discussed by various authors

Authors Elements

Benson (1986)

Total visibility – of equipment, people, material and processes;

Synchronization and balance – of production to sales and supply to

production; Respect for people – line operators are responsible for

production, problem solving and improvement; Flexibility – adapt

production to customer needs; Continuous improvement – never

satisfied with the process; Responsibility for the operation’s

environment – those who design, manage and operate the processes

are responsible for the outcome; Holistic approach – company-wide

philosophy of elimination of waste.

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Lee and Seah

(1987)

The number of jobs drawn (completed); The process utilization; the

set/run time ratio; The mean and variance of queue time; The mean

and variance of job tardiness; and The work-in-progress level.

Golhar and

Stamm (1991)

Elimination of waste, Employee involvement, Supplier long-range

relationships, and Total quality control.

Clarke and Mia

(1993)

Inventory Control

Inventory level, Inventory turnover, Space available in factory,

Space available in warehouse.

Production Control

Cycle time, Labour productivity, Down time, Capital productivity

or machine utilization, Number of change over, Change over time,

Reduction in unit cost, Safety

Quality Control

Scrap, Rework and number of defects, Quality costs, Reduction in

write offs, Appraisal costs.

Customer Service Control

Schedule achievement, Order fill rate, Stock outs, Outstanding

orders, Outstanding requisitions, Value of product awaiting

dispatch.

Clarke and Mia

(1993)

Reduction of raw materials inventory, Reduction of work in process

inventory, Reduction of throughput time, Reduction of finished goods

inventory, Improved product quality, Faster customer service,

Reduction of waste and rework, Improved control of production,

Product diversification.

Other objectives listed by respondents include:

Improved utilization of factory space; Reduction in storage space,

Improved labour productivity, Improved scheduling and

communications, Reduction of departmental thinking, Employee

participation and team building, Customer requirement, More accurate

inventory, Improved cash flow, Survival.

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Ramarapu et al.

(1995)

Grouped JIT elements into the five broader critical factors:

Elimination of waste, Production strategy, Quality control and

quality improvement, Management commitment and employee

participation and Vendor/supplier participation.

They further sub classified these elements:

Elimination of waste:

Reduction in waste, Reduce lot size, Reduce lead-time, Automation

Production strategy:

Reduced set-up times, Stable production, Preventive maintenance,

Group technology.

Quality control and improvement:

Continuous quality improvement, Halt production line, Statistical

process control, Quality circles

Management commitment and employee participation (in decision

making):

Cross-training/education, Team decision making, Management

participation and commitment Employee suggestions

Vendor/supplier participation:

Quality parts, Reliable and prompt deliveries, Small lot size,

Communication with suppliers Long-term contract, Supplier

Training, Single source supplier.

Spencer and

Guide (1995)

Production strategy elements: Set-up reductions, Lot size reductions,

Preventive maintenance, Physical layout management, cross-trained

workers, effective capacity utilization, Plant-wide programme

adoption of JIT methods, In-house quality, JIT vendor strategy, Lot

size reductions, Lead time reduction, Quality, Sole sourcing, JIT

human relations strategy, Mutual respect, JIT seen as overall

philosophy of business, JIT education throughout organization.

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Fuller (1995)

Small lot sizes delivered in exact quantities, Few suppliers, Ideally

one per component, Supplier selection based on quality and delivery

performance, Long term contracts, Standardized packaging, Reduced

paperwork, Delivery synchronization to production, Geographically

close suppliers, Improved data exchange.

Zhu and

Meredith

(1995)

Set-up time reduction, In-house lot size, Group technology, Cross-

training, Preventive maintenance, Vendor lot size, Sole sourcing,

Vendor lead time, Quality certificates from vendor, Pilot project, JIT

team, JIT education, Outside consultant, JIT champion, Investigate

suggestions, Authority to stop lines, Quality circles, Schedule

stability, Top management commitment, Relationship with supplier,

Flatten bill of materials, Communication, Co-worker relations,

Flexibility

Yasin and

Wafa (1996)

Exponential smoothing models, Regressed models, Econometric

models, Customer provided forecasts, Type and extent of process

automation and process, Layout modification, CAD, CAM, Robotics,

Use of CIM, Extent of modifying process layout,. Availability of

quality assurance methods and systems, Quality circles, Statistical

quality procedures, Total quality management.

McLachlin

(1997)

Promotion of employee responsibility, Provision of training,

Promotion of teamwork, Demonstration of visible commitment,

Provision of workforce security, and Use of group performance

measures.

Wafa and

Yasin (1998)

The four categories are: Management, Workers, Process, and

Suppliers.

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Chandra and

Kodali (1998)

Organization in modules/cells, Highly motivated work force (HMW),

Respect to humanity and creativity, Top management support (TMS),

Continuous improvement (kaizen), Flexible workforce, Focused

factory (flow and layout), Group technology, Reliable equipment,

Automation, Efficient material handling system and standard

containers, Preventive maintenance, Smooth build-up rate (Heijunka),

Reduced set-up time, Housekeeping, Simplification of product and

process, Kanban system, Total quality management, Small lot

frequent deliveries, Vendor reliability, Few committed suppliers,

Vendor flexibility,

Claycomb et al.

(1999b)

JIT purchasing, JIT selling, JIT production, Size, Natural logarithm of

employees, Natural logarithm of sales, Inbound inventory, In-process

inventory, Spans of control, Senior marketing executive span, Senior

production executive span, Senior logistics executive span, Senior

purchasing executive span, Hierarchical layers, Layers for marketing,

Layers for production, Layers for logistics, Layers for purchasing,

ROI performance, profit growth Performa

Canel et al.

(2000)

Total visibility, Respect for people, Flexibility, Continuous

improvement, Holistic approach, Total visibility, Synchronization and

balance, Flexibility, Respect for people.

Cua, et al.

(2001)

Setup time reduction, Pull system, JIT delivery by suppliers,

Equipment layout, Daily schedule adherence

Ahmad et al.

(2002)

Supplier Agreement. Set-up Time Reduction, In-House Lot Sizes,

Group Technology, Cross Training, Preventive Maintenance,

Uniform Flow Loading, Statistical Process Control, Focus Factory,

Employee Involvement, Employee Empowerment, Jidoka, Improved

Performance Measurement, Work Team, Vendor Lot Sizes,

Suppliers, Vendor Lead Time Reduction, Quality Certification of

suppliers, Kanban.

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Yasin et al.

(2003)

Reduction of rejects of final goods/services, Improvement in

relationship with suppliers, Reduction in the variability of workload

levels, Reduction of inventory, Improvement in customer service,

Improvement in on-time receipts from suppliers, Improvement in

worker morale, Improvement in operational efficiency, Reduction in

labor turnover, Extent to which the company would recommend, JIT

to others, Set-up time reduction, Improvement in customer

perceptions of product/service quality, Lead time reduction, Monetary

savings

Mistry (2005)

Point-of-use with reduced floor space, Reduced floor space with

capital cost savings, Point-of-use with reduced inventories, Reduced

inventories with carrying cost savings, Point-of-use with fewer

material transactions or better quality control, Fewer material

transactions or better, Quality control with increased revenue,

Assemble to order with reduced floor space, Reduced man hours with

labor cost savings, Assemble to order with reduced cycle times, No

physical inventories with reduced man hours, Supplier program with

reduced man hours.

Wakchaure et

al. (2006)

Lot size reduction, Setup time reduction, Buffer stock removal,

Material handling discipline, Group technology, Product

scheduling,Under capacity scheduling, Zero deviation from

scheduling, Component item standardization, Multifunction workers,

Worker centered quality control, Poka Yoke, Preventive maintenance,

Kanban, JIT purchasing, Quality circles, Relationship with

supplier,Effective communication, Top management commitment,

Sole sourcing, Process flexibility, Kaizen, Reliable and prompt

deliveries, Automation, Long term contract, Supplier training, SPC,

Housekeeping, Lifelong employment, High quality, Layout

improvement, Product and process simplification, Smooth flow of

material, SQC, WIP reduction, Zero defect, Support from workers,

Stock to dock delivery, Standard container, Firm schedule to suppler,

Vendor location, Buyer control over freight, Respect for humanity,

Reliable equipment, Smooth built up rate, TQM, Focused factories.

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Kumar and

Grewal (2007)

Automation, Administrative Efficiency, Bar Code technology, Buffer

Stock removal, Continuous improvement, Customer Care, Customer

Satisfaction, Communication and Information Sharing, Design for

service, Employee involvement, Flow layout, Flexible workforce,

Group technology, Housekeeping, Inventory reduction, JIT

purchasing, JIDOKA, Kanban card or system, Lot size reduction,

Lead time reduction, Poka yoke, Preventive maintenance, Product

simplification, Process simplification, Process flexibility, Process

improvement, Quality circles, Quality functions deployment, Standard

containers, Small lot size, Setup time reduction, Smooth flow of

materials, Standardization, Statistical process control, Total

productive maintenance, Team work, Work-in-process reduction,

Waste reduction, Zero defect, Zero deviation schedule.

Alawode and

Ojo (2008)

Enlightenment and education, Quality control, Redesigning and

restructuring of working environment, Flow manufacturing,

Improvement of customer relation, Improvement of productivity,

Reduced idle inventory levels.

Wilson (2009)

Direct communication, Market-based pricing and bidding

mechanisms, Coordination by plan, Notification, Sequencing,

Tracking, Inventory management, Standardization Scheduling,

Synchronization

Kumar 2010

Buffer Stock Removal, Continual quality improvement, Effective

Communication, Employees empowerment, Poke-yoke, Frequent and

reliable deliveries, Group incentive scheme, High QC visibility, Job

enlargement, Kanban system, Line stop strategy, Long-term

employment, Long-term QC commitment, Multifunctional worker,

TPM, QC authority to worker, QC authority to supplier, Quality

certification to suppliers, Quality circles, Regular quality auditing,

Self-correction of defects, Set up time reduction, Short lead time,

Small lot size, Standard containers, Standardization, Process control,

Statistical quality control, Strong buyer- supplier relationship, Team

work, Total quality control, U-cells, Vendor rating, Scheduling

flexibility, Zero defect, zero deviation from schedule, 100% quality

inspection.

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Singh and Garg

(2011 a)

Master schedule, Automation and autonomation, Buffer stock

removal, Cellular manufacturing, Computer-integrated manufacturing,

Continuous improvement, Effective communication, Focused

factories, Flexible workforce, JIT purchasing, High quality, Jidoka,

Kanban system, Layout improvement, Process flexibility, Product and

process simplification, Pull-controlled flow, Quality circles, Robots,

Setup time reduction, Small lot size, Standard containers,

Standardization, Statistical process control, Statistical quality control,

Streamlined process design, Total productive maintenance, Total

quality control, Under capacity scheduling, Worker-centered quality

control, Work-in-process reduction, Zero defect, Zero deviation

schedule, Multi-functional workers.

Singh and Garg

(2011b)

Establishing lot size, Vendor selection, Vendor evaluation, Inspection

of incoming materials, Negotiating with vendors, Determining mode

of transportation, Setting specifications, Paper work, Packaging

Kootanaee et

al. (2013)

People involvement: Stockholders and owners of the company,

Labour organization, Management support, Government support

Plants: Plant layout, Demand pull production, Kanban, Self-

inspection, Continuous improvement and Systems

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Figure 2.14 Broad classification of JIT elements

After going through the literature it is found that JIT elements can be broadly

classified as shown in Figure 2.14 and critical elements of JIT are given in Figure 2.15.

JIT elements have direct impact on the performance of any organization. Ahmad

et al. (2004) have depicted the relationship between JIT elements, operating

performance and financial growth of an organization. Figure 2.16 gives the path

diagram between JIT elements, operating performance and financial growth.

Figure 2.15 Critical elements of JIT

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Figure 2.16 Path diagram between JIT elements, operating performance and

financial growth

2.7 Success factors for strategic JIT implementation

In a JIT environment, any system for measuring performance must be designed

to reflect the new production philosophy. Such a system should be capable of measuring

and reporting progress toward total quality control, reducing inventory levels, faster

setup times, reduced lead time, and new product launch times. Equally important would

be measures indicating improvement in on-time deliveries, floor space utilisation, and

quality yield. Such a system may require the elimination of some traditional short-term

financial measures and include some new, more relevant non-financial measures of

performance (Green et al., 1991).

Mistry (2005) has discussed implementation of JIT in supply chain. Figure 2.17

reveals the strategies to be employed in improving processes and outcome of these

improvements.

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Figure 2.17 Mistry’s Data-supported model of JIT-driven profitability

Table 2.6 Ahmad’s Performance Measures and their Categories

Category Performance measure

Quality

Conformance to specifications, Cost of quality, Vendor quality

Sales forecast accuracy, Record accuracy, Number of suppliers

Yields

Time Manufacturing lead times, Vendor lead times, Changeover/setup

times, Meeting project milestones.

Flexibility

Number of engineering changes, Number of materials part

numbers

New product introduction, New model introduction, New

process/equipment introduction

Delivery/Customer

Service

Meeting production schedules, On-time delivery, Customer

surveys

Social/

Environmental

Education/training budgets, Safety, Minimizing environmental

waste, Environmental monitoring

Cost/Financial and

Traditional

Inventory turnover, Cost-reduction: dollar savings, Dollars of

capital investment, Process R&D costs, Product R&D costs,

Dollar shipments per period, Unit material costs, Unit labor costs,

Unit overhead costs,

Margins (Contribution/Gross), Return on investment, Capacity

utilization, Department budget control

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The success factors that are required for the implementation of JIT are broadly

classified as: relationship with vendor/supplier, location of organization, plant layout,

culture of organization, production techniques, and communication with dealers.

Mackelprang and Nair (2010) in his study found that JIT is having direct relationship

with the performance measures. Ahmad et al. (2002) have discussed the performance

measures related to each element of JIT and these performance measures are listed in

Table 2.6.

2.8 Benefits/contributions of JIT

JIT implementation has got many benefits. Claycomb et al. (1999b) in his

research work found that inventory reduction is one of the most commonly cited

theoretical advantages of JIT. But most important benefit listed is reduction in waste,

and it may be waste of raw material, waste during production or process, and waste of

finished goods. Some of the benefits listed by various authors include: Elimination of

waste in production and material (Tesfay, 1990; Hobbs, 1997), elimination of some

material handlers resulting in labour cost savings as a result of JIT (Yasin et al., 2004a),

improving communication internally, i.e., within the organization and externally, i.e.,

between the organization and its customers and vendors. In Inman and Mehra (1991),

reduction in cost of purchasing raw material or reduction in setup (ordering) which is a

major cost to most organizations (Ansari and Modarress, 1990; Gargeya and Thompson,

1994; Yasin et al., 2004a), improvement in the quality level of incoming material, less

paperwork (Yasin et al., 2004a), reducing inventories (raw material, Work-in-process,

Finished goods), reducing lead-time, reducing throughput time, improvement in the

quality of products, increasing productivity and enhancing customer responsiveness,

shortened customers response time and relation with vendors (Schonberger, 1982a;

Hernandez, 1989; Ramsay et al., 1990; Arogyaswamy and Simmons, 1991; Crawford

and Cox, 1991; Clark and Mia, 1993; Norris et al., 1994; White, 1993; Mazany, 1995;

Hobbs, 1997; Chase et al., 1998; Yasin et al., 2004a), raise organisational discipline and

managerial participation (Francis, 1989), reduction in the number of grievances of filed

by workers (Yasin et al., 2004a), increased employee involvement (Hernandez, 1989;

Chase et al., 1998), integration of the different functional areas in the organization. It

especially bridges the gap between production and accounting or enhance in

productivity (Johansson, 1988; O’Grady, 1988; Clark and Mia, 1993), reduced

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downtime of machinery, reduced failures (Mazany, 1995), decreasing manufacturing

costs without compromising cost (Hernandez, 1989; Chase et al., 1998), improving

quality that consistently and continually meets customers requirements, minimising

levels of inventory and improving relationship with suppliers (Aghazadeh, 2003),

simplification of processes, improved quality, and increased flexibility (Mazany, 1995),

reducing the labour turnover rate, reducing manufacturing lead times, reducing setup

time (Wafa and Yasin, 1998; Yasin et al., 2004a), reducing use of space, lower costs,

better quality and higher competitive advantage (Hernandez, 1989; Inman and Mehra,

1993; Chase et al., 1998), significant reduction in rejects of outgoing final

products/services/enhanced flexibility and ability to meet customer demands

(Hernandez, 1989; Chase et al., 1998; Yasin et al., 2004a), where as Schonberger and

Ansari (1984) included the following benefits of implementing JIT: low part costs – low

scrap costs; low inventory carrying costs; quality – fast detection and correction of

unsatisfactory quality, and ultimately higher quality purchased parts; design – fast

response to engineering change requirements; administrative efficiency – fewer

suppliers, minimal expediting and order, release work; simplified communications and

receiving activities; productivity – reduced rework, reduced inspection; reduced parts-

related delays; capital requirements – reduced rework inventories of purchased parts,

raw materials, WIP and finished goods.

By using JIT practices, the firms have saved money, as these funds that are used

to procure inventories can be used elsewhere. Implementation of JIT has helped in

saving of storage space in the industry, as areas used to store inventories can be used for

other more quicker response to customers; defect rates are reduced, resulting in less

waste and greater customer satisfaction; work in process inventories can be reduced or

eliminated.

In manufacturing, JIT has been credited with many holistic benefits. These

benefits include reduced inventory levels; reduced investment in inventory; improved

quality of incoming materials; and consistent high-quality products. Some additional

benefits of JIT that have been achieved in manufacturing firms are: improved

operational efficiency, uniform workstation loads; standardised components;

standardised work methods; cooperative relationships with suppliers; closer

collaboration with customers, and improved customer satisfaction (Yasin et al., 2004b).

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Chungi and Bakar (2001) depicted beneficial effects of JIT purchasing practice

on quality of product and these benefits are listed in Table 2.7.

Table 2.7 Chung and Bakar’s Effect of JIT Purchasing Practices on Quality

Purchasing

Activities JIT Practice Effect on Quality

Lot size Purchase in small lot-sizes

with frequent deliveries

Fast detection and correction

of defects

Supplier

Evaluation

Suppliers evaluated on ability

to provide high quality

products

Suppliers put more emphasis

on their product quality

Supplier Selection

Single source in close

geographical area

Frequent on-site visits by

technical people; rapid and

better understanding of quality

requirements

Product

Specification

Fully specify only essential

product characteristics

Suppliers have more discretion

in product design and

manufacturing methods, which

results in specifications that are

more likely to be attainable

Bidding

Stay with the same suppliers;

do informal value analysis to

reduce bid price; no annual

rebidding.

Suppliers can afford cost of

long term commitment to meet

quality requirements, and they

become more aware of buyer’s

true requirement

Receiving

Inspection

Vendor certifies quality;

receiving inspections are

reduced and eventually

eliminated

Quality at source (the supplier)

is more effective and less

costly

Paperwork

Less formal system; reduced

volume of paperwork

More time available for

purchasing people to devote to

quality matters.

2.9 Stumbling blocks of JIT manufacturing

Although JIT is having many advantages but there seems to be certain

reservations or limitation also. The manufacturer’s ability to meet the consumer’s

demand well in time has been affected by several sources of uncertainty, in this highly

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competitive and demand driven production with JIT inputs. Due to this, manufacturer

may suffer loss of revenue and customers. This has great impact on the financial and on

the viability of the manufacturer. So before implementing JIT manufacture has to

determine whether they can meet demands of customers in given time frame or not

(Hussain et al., 2012). JIT requires several modifications in support activities

(accounting system, personnel evaluation, worker and management incentive systems,

etc., both within and outside the firm, which, in some cases, require plentiful

investments. Use of JIT production systems can be problematic. Most companies

introduce JIT into an existing plant trying to have the minimal interference on

production and achieving a smooth changeover requires careful planning and

prioritisation of the JIT techniques to be implemented (Moreira and Alves, 2006).

According to Zipkin (1991), the highest risk in reducing inventories too fast is

that the suppliers and the workers came under pressure because, if delays occur, all the

system is in danger. What hampers successful JIT implementation is the lack of clarity

and priority leading to confusion and wasteful expenditure of organisational energy

(Mahadevan, 1997).

Yasin (2004b), in his work highlighted factors contributing to failure of JIT and

these includes, lack of cooperation from vendors in a form of inconsistent timing and

quantities of deliveries, the lack of resources to invest in direct linkages with vendors,

the unwillingness of workers to perform multi-tasks, management’s resistance to

sharing operational power with employees, the lack of management confidence in

hourly workers’ commitment to the organization, and the lack of accurate forecasting

system.

Clark and Mia (1993) have investigated about JIT implementing and non-JIT

implementing firms in Australia and listed the following reasons for not implementing

JIT, the risk of late delivery is too high; constraint is capacity; products are unique and

built to customer specification; its practicality is questioned by some managers; TQM,

materials resources planning, or quick-response manufacturing are the main thrust of

our systems development efforts; management information system is inadequate to

support JIT; customers or suppliers are inflexible; inventories are small; raw materials

are always available on a JIT basis; raw materials are available on a seasonal basis (food

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industry); raw materials are imported and supplier lead times are unpredictable. Figure

2.18 explains the problems of Just in Time Manufacturing

Figure 2.18 Problems of JIT implementation

2.10 Just in Time manufacturing in the Indian context

A manufacturing organization has to competitive for its survival. It has to supply

products of consistent high quality at reliable and reduced delivery time at reasonable

cost without compromising with quality. It may be extremely difficult for developing

countries like India to promote advanced manufacturing technology (AMT) because of

limited resources. Such countries need techniques which are characterized by low

investment, high short-term pay-off, high rate of productivity and quality. A ‘Just-in-

Time’ (JIT) based approach is one such approach to achieve the above stated goals.

Very few research papers on JIT implementation in Indian context are available

for reference at present. Lohar (2011) has conducted the survey of JIT implementing

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Indian industries and found that the that JIT has the potential to increase the operational

efficiency, quality and organizational effectiveness of Indian industries while some

basic elements of JIT have been slightly difficult to implement in existing production

system of industries. According to author, to gain the benefits of JIT, Indian industries

should be willing to modify their procedure for dealing with supplier, analysis of

operations to identify the areas of standardization, simplification and automation and

reengineering of operational processes and procedures are some important issues, which

should be examined prior to implementation of JIT. It has been concluded that if these

issues are not adequately addresses the JIT efforts is bound to encounter human and

supplier related problems. Singh and Garg (2011b) have explained about JIT movement,

its concept, elements of JIT, motivational factors for JIT and benefits of JIT. Manoj

(2011) conducted his research in agro manufacturing units in Kerla (KAMCO) and

found that philosophies like JIT has become an imperative for survival and growth for

any manufacturing company, rather than just an option. The author also explained the

road map for adoption of JIT in KAMCO.

Malik et al. (2011) have conducted a study on implementation of JIT quality

management in Indian manufacturing industries and statistically analysed and depicted

that the degree of difficulty in implementation of JIT based quality management found

to be 3.18 on a scale of 0-5 that implying that implementation of JIT based quality

management in totality is reasonably difficult in Indian industries.

2.11 Challenges for JIT implementation in Indian manufacturing industry

… JIT is something that is already implemented in the industries of India

without much knowhow what JIT actually means (Telsan et al., 2006). As the

organizations across the world have faced stiff cut-throat competition in the last three

decades, the Indian industry too could not escape the brunt of globalisation (Ahuja and

Khamba, 2008). Due to entry of multinational companies since early 1990’s, Indian

manufacturing industry has also witness’s stiff competition in recent times. Owing to

opening up of the Indian economy from merely a regulated economy, the manufacturing

industry has been faced with uphill task of competing with the best in the world (Ahuja

and Khamba, 2008). The competition worldwide has been witnessed in terms of

lowering of costs, improved quality and products with high performance (Chandra and

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Sastry, 1998). Moreover reducing lead times and setup time, innovation times and

controlling inventories have lead to increasing demands on the organisation’s

preparedness, adaptability and versatility.

Indian manufacturing sector is one of the largest industrial powers of the word,

which has never been allowed to realise its potential due to the interference of

bureaucratic governments and protectionists (Kumar, 2010). Due to this Indian goods

are unable to compete with the product of other countries. Traditionally, Indian

manufacturing organizations have suffered from inherent problems like poor

responsiveness to changing market scenarios, low productivity, poor quality, poor cost

effectiveness of production systems, stubborn organisational character and structures,

uncertain policy regimes, low skill and knowledge base of employees, low production

automation, non-motivating work environments, customer complaints, high utility rates,

high wastages associated with production systems, high labour rigidity, high internal

taxes and infrastructural glitches (Ahuja and Khamba, 2008). Challenge of cost effective

manufacturing strategies has to be adopted for staying competitive by Indian industry

(Chandra and Kodali, 1998). While implementing effective JIT manufacturing, the

Indian organizations have often been bothered with some problems and challenges like

difficulties to understand business economics, reluctance to change, worker’s

apprehensions of more work, management’s commitment and inability to realise the

same level of benefits as reaped by developed countries by imitating the JIT

implementation procedures and practices adopted abroad. Thus Indian manufacturing

organizations need to shed the sluggish character and move forward aggressively to

develop adapt proactive processes and practices for overcoming the inherent

deficiencies in manufacturing systems for harnessing distinct competencies in

comparison to their global competitors (Ahuja and Khamba, 2008). The present study

critically examines the factors effecting the implementation of JIT practices in Indian

manufacturing industry. Currently many models are undergoing failures and in this

situation this study is relevant.

Implementation of JIT in Indian industry has a potential to yield an enormous

saving and creation of new productivity ethics which can go in a long way to

strengthening of Indian economy (Singh and Garg, 2011a). But researchers have listed

some issues that can make or break the implementation of JIT manufacturing.

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Successful implementation of JIT requires top management involvement and proper

employee training. Wakchaure et al. (2006) listed the major reasons pointed out for the

slow implementation by respondents are: Lack of information on JIT implementation,

Lack of justification for practicing JIT, Lack of assistance available from consulting

firms and government bodies, Lack of formal cross training program for workers,

Problem in maintenance time reduction, Initial high investment in layout improvement

to suit JIT requirements, JIT purchasing due to lack of infrastructure.

Venkatesh et al. (2007) listed the following difficulties in implementing JIT in

Indian: Lack of cooperation of suppliers in correctly supplied material, the lack of

resources to invest in direct linkages with vendors, Lack of formal cross training

programs for workers, Lack of formal training/education, Lack of cooperation from

vendors in the form of inconsistent lead times and capacity constraints imposed by

suppliers, Lack of an accurate forecasting system, Lack of strategic planning, Problem

in maintenance time reduction through machine, modification or replacement of existing

equipment, Quality problems with supplied material, Lack of cooperation of suppliers in

timing of supplied materials, Reduction in the levels of work load variability, Problems

with machines (Machine failures and reliability, Lack of information and

communication with suppliers, Inability to meet schedule, Lack of communication

between workers and management, Problem in line balancing, Lack of performance

measure, Problem in lead times reduction, Problems in layout modification, Lack of

team work spirit, Departmental conflicts, Poor quality. Whereas Malik et al. (2011)

listed following factors for the slow implementation of JIT: High cost of

implementation, Informal/casual quality auditing, On QC, lack of communication, Lack

of customer awareness on QC, Lack of employee participation, Lack of production

technology, Lack of support from workers, Lack of support from supervisors, Lack of

support from suppliers, Lack of support from designers, Lack of support from HRD,

Lack of support from R&D. Figure 2.19 gives the reasons for slow implementation of

JIT in Indian manufacturing industry.

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Figure 2.19 Slow implementation of JIT in Indian manufacturing industries

2.12 Concluding Remarks

The contributions of JIT implementation initiatives for accruing strategic

benefits for meeting the challenges posed by global competition are highlighted in the

literature. Of all the strategies employed by an organization, JIT has emerged as the

front runner to compete in the global business arena. An effective JIT implementation

programme can focus on addressing the organisation’s problems, with a view to

optimise purchasing, production, utilisation of workers and delivery of finished goods.

JIT has become a new management practice in all types of organizations. In recent

years, many organizations have showed significant improvements in business through

JIT implementation. JIT strategies and philosophy can be effectively employed to

realise fundamental improvements of manufacturing performance in the organization,

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thereby leading the organization to compete with others successfully in this highly

competitive environment.

JIT has emerged as a highly effective global strategy by which firms can

enhance their performance and achieve competencies. Thus, in this highly competitive

scenario, by using JIT the organizations could scale new levels of achievements. The

implementation of JIT really makes the difference between success and failure of the

organizations. The literature reveals the relevance of strategic JIT initiatives in the

manufacturing/service sector and the strategies adopted by organization for

implementation of JIT to realise its objectives successfully. From the literature, it is

evident that the successful JIT implementation programme can enable an organization to

gain an edge over the others for achieving enhanced manufacturing performance and

delivering the products of good quality and competitive rates.