Lean production and jit

GHANSHYAMDAS SARAF COLLEGE OF

ARTS & COMMERCE

SUBJECT:- PRODUCTION MANAGEMENT AND MATERIAL MANAGEMENT

TOPIC:- LEAN PRODUCTION AND JIT(JUST-IN-TIME)

GROUP NO:- 6

GROUP MEMBERS :-

Names Roll no.

Kusum Parmar 65

Madhushree Rangrej 77

Thrapti Shetty 91

Pooja Singh 96

Kajal Singh Yadav 110

Sanjoli Bhageria 115

ACKNOWLEGEMENT

I would like to express my gratitude to all those who gave us the possibility to complete this project. I want to thank prof. Dipti Soni for her suggestions and encouragement in all the time research of the project which has helped us to acquire a total information. I would here by like to thank my parents and group members who helped me throughout the project.

INDEX

1.What is lean production?2.About lean production.3.JIT(just-in-time).4.History & development of JIT system.5.Concept of JIT6.Characteristics/features of JIT.7.Benefits of JIT.8.Research methodology.9.Introduction to Bisleri product.10. Application of lean production-Bisleri

company.11. Analysis.12. Conclusion.13. Appendix

WHAT IS LEAN PRODUCTION

Lean production has its roots in Toyota Automobiles Co. of Japan, where waste was to be avoided at all costs:

1. The waste in time caused by having to repair faulty products.

2. The waste of investment in keeping high inventories and

3. The waste of having ideal workers.

The elements of lean production are:

1. To consider the organization in terms of supply chain of value streams that extends from suppliers of raw materials, through transformation to the final customer.

2. To organize workers in terms and to have every one in the organization conscious of his or her work.

3. To produce products of perfect quality and to have continuous quality improvements as a goal.

4. To organize the operation by product or cellular manufacturing, rather than using a functional or process lay-out.

5. To operate the facility in a just-in time mode.

Just-in-time is a key element of lean production,(conceived by Taiichi Ohno, the former president of Toyota Motor Co. of Japan in the 1980’s). the Japanese manufacturing success, with increased productivity, low product cost and often superior quality products can very much be attributed to JIT manufacturing.

The ultimate goal is to provide perfect value to the customer through perfect value creation process that has ZERO waste.

Lean production has its key element that is -JIT (Just –In-Time)

JIT (JUST IN TIME)

JIT is defined as “a philosophy of manufacturing based on planned elimination of all waste and continuous improvements of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery and including all stages of conversation from raw materials onward. The primary elements of JIT are to have only the required inventory when needed, to improve quality to zero defects, to reduce lead times by reducing set up times, queue lengths and lot sizes, to incrementally revise the operations themselves and to accomplish these things at minimum cost. In the broad sense, it applies to all forms of manufacturing, job-shop, process as well as repetitive”.

“JIT is an approach that seeks to eliminate all sources of waste in production activities by providing the right part at the right place at the right time.”

It is known by different names:

- The Toyota system.

- Zero Inventory.

- Kan–Ban system.

JIT means:

1. Producing the quantity of units that is needed, no more. No less.

2. Producing term on the date and at the time required, not before an not after .

3. That a supplier delivers the exact quality demanded, at the scheduled time and date.

Any deviations from these requirements means that either resources are being unnecessarily wasted or that customers’ needs are not being respected.

JIT is simply an acronym for being efficient, organized and rigorous, having the ability to be flexible, with an ultimate objective of satisfying the customers, respecting delivery time, having the specified quality and producing at minimum cost.

Just-in-time Philosophy

JIT is a philosophy of continuous and forced problem solving. With JIT, supplies and components are “pulled” through a system to arrive where they are needed and when they are needed. When good units do not arrive in time (just in needed), a “problem” has been identified. This makes JIT an

excellent tool help operations managers add value by driving out waste and unwanted variability. Because there is no excess inventory or excess time in JIT system, cost associated with

unneeded inventory are eliminated and throughput improved. Consequently, the benefits of JIT are particularly helpful in supporting strategies of rapid response and low cost.

HISTORY AND DEVELOPMENT OF JIT SYSTEM

The JIT system was developed at the Toyota Motor Company in Japan. Even though JIT might be traced back to the Japanese shipbuilding industry, the modern application of JIT was popularized in the mid 1970’s by Toyota, by Taiichi Ohno and his colleagues. The JIT concept was then transferred to the U.S. about 1980 at Kawasaki’s Licoln, Nebraska plant. Since then, many leading cooperations in the US have implemented JIT and it has achieved widespread use around the world.

The roots of the JIT system can probably be traced to the Japanese environment. Owing to lack of space and lack of natural resources, the Japanese have developed an aversion to waste. They view scrap and rework as waste and thus strive for perfect quality. They also believe that inventory storage waste space and ties up valuable materials. Anything that does not contribute to value to the product is viewed as waste. U.S. companies, with wide open space and vast supply of raw material, have not viewed waste in the same way as the Japanese. As a result, naturally, JIT philosophy developed in Japan. Yet, there is nothing cultural inherent in the JIT system that prevents companies anywhere in the world from using it or improving on it.

CONCEPTS OF JIT

The three fundamental concepts of JIT are:

i. Elimination of waste and variability

ii. “pull” versus “push” system and

iii. Manufacturing cycle time (or “throughput” time)

These concepts are discussed below:

Waste reduction and variability reduction

Waste reduction: ‘Any thing that does not add value’ is described as a waste in the production of goods or services. Products being stored, inspected or delayed, products waiting in queue and defective products do not add value and hence, they are 100 percent waste. Moreover, any activity that does not add value to product from the customer’s perspective is waste. JIT speeds throughout, allowing faster delivery times and reducing work-in-process. Reduced work-in-process releases capital tied up in inventory for other more productive purposes.

Variability reduction: To achieve just-in-time material movement, it is necessary that variability caused by both internal and external factors are reduced. Variability is any deviation

from the optimum process that delivers perfect product on time, everytime. Inventory hides variability or in other words problems. The less variability in a system, the less waste in the system. Most of the variability is caused by tolerating waste or by poor management.

Reasons for occurrence of variability are:

1. Employees, machines and suppliers produce units that do not conform to standards, are late or not of the proper quantity.

2. Engineering drawings or specifications are inaccurate.

3. Production personal try to produce before drawing or specification are complete.

4. Customer demands are unknown.

Variability may often go unseen when inventory exists. The JIT philosophy of continuous improvements removes variability, which allows movement of good materials just-in-time for use. JIT reduce materials throughout the supply chain.

Push versus Pull system:

The concept behind JIT is that of a pull system. It is a JIT concept that results in material being produced or supplied only when requested and moved to where it is needed just as it is

needed. A pull system uses signals to request production and delivery from upstream sections to the stations that has production capacity available. This concept is used both within the immediate production process and with suppliers. By pulling the material through the system in very small lots, just as it is needed. The cushion by inventory that hides problems is removed, problems becomes evident and continuous improvement is emphasized. Removing the cushion of inventory also reduces both investment in inventory and manufacturing cycle time.

Push system is system that pushes materials into downstream workstations regardless of their timelines or availability of resources to perform the work. Push system are antithesis of JIT.

Manufacturing cycle time is the time between the arrival of raw material and then shipping of finished products. JIT helps in reducing the manufacturing cycle time.

CHARACTERISTICS OF JUST-IN –TIME SYSTEM:

JIT system focus on reducing inefficiency and unproductive time in production process to improve continuously the process and quality of the products or services. Employee involvement and inventory reduction are essential to JIT operations. The salient characteristics of JIT are:

1. Pull method of material flow.

2. Constantly high quality.

3. Small lot sizes.

4. Uniform workstation loads.

5. Standardized components and work methods.

6. Close supplier ties.

7. Flexible workforce.

8. Line flow strategy.

9. Automated production and

10. Preventive maintenance.

The above characteristics are discussed in the following paragraphs.

1. Pull Method of Materials flow: In the pull method, the customer demand activates production of the item. The concept behind JIT is that of a pull system, which is a system that pulls a unit to where it is needed just as it is needed. A pull system uses signals to request production and delivery from stations upstream to the station that has production capacity available. The “pull” concept is used both within the immediate production process and with suppliers. By pulling material through the system in very small lots just as it is needed, the cushion of inventory that hides problems is removed, problems become evident and a continuous improvements emphasized. Removing the cushion of inventory also reduces both investments in inventory and manufacturing cycle time.

2. Consistent high quality: JIT systems seek to eliminate scrap and rework in order to achieve a uniform flow of materials. Efficient JIT operations require conformation to product or services specification and implementation of behavioural and statistical methods of TQM. JIT system control quality at the source, with workers acting as their own quality inspector.

Management must realise the enormous responsibility this method places on the workers and must prepare them for the same in one division of general motors (GM), when JIT was implemented in 1985, management authorized its workers to stop the production line by pulling a cord if quality problem arose at their stations- a practice the Japanese call “andon”. GM also eliminated production line inspectors and cut the number of supervisors by half. Later, the “andon” system was modified to include a yellow warning cord so that workers can call for help without stopping the line.

3. Small lot sizes: Rather than building up a cushion of inventory, users of JIT system maintain inventory with lot sizes that are as small as possible. The benefits of lot sizes are:a. Reduction of cycle inventory (work-in-process). The

average cycle inventory equals one-half the lot size. Reducing lot size reduces the cycle inventory which in turn reduces the time and space involved in manufacturing and holding inventory.

b. Small lot sizes help reduce lead times. A decline in lead in turn reduces WIP inventory because the total processing time at each workstation is greater for large lots than for small lots. Also, a large lot has to wait longer to be processed at the next workstation while that workstation finishes working on another large lot. In

addition, if any defective items are discovered, large lots cause longer delay because the entire lot must be inspected to find all the items that need rework.

c. Small lots help achieve a uniform operating system workload. Large lots consume large chunks of processing time on workstations and therefore complicate scheduling. Small lots can be processed more effectively, enabling utilization of capacities more efficiently.

However, the disadvantages of small lot sizes is increases in the frequency of set-ups. For operations having sizeable set-up times, small lots may result in waste of employees and equipment time due to repetitive set-up. Hence, in JIT production , the operations must reduce the set-up time to realize the benefits of small-lot production.

4. Uniform workstation loads: The JIT system works best if the daily load on individual workstation is relatively uniform. Uniform loads can be achieved by assembling the same type and number of products each day, thus creating a uniform daily demand at all workstations. Capacity planning which recognize capacity constraints at critical workstations and line balancing are used to develop the monthly master production schedule.

5. Standardized components and work methods: The standardization of components called part commonality or modularity increase repeatability. For example, a firm producing 10 products from 1000 different components could redesign its products so that they consist of only 100 different components with longer daily requirements. Because the requirements per components increases, so does repeatability, that is, each worker performs a standardized tasks or work method more often each day. Productivity tends to increase because with increased repetition, workers learn to do tasks more repetition, workers learn to do tasks more efficiently. Standardized of components and work methods aid in achieving the high productivity, low inventory objectives of JIT systems.

6. Close suppliers ties: Because JIT system operates with very low levels of inventory, close relationships with suppliers are necessary. Stock shipments must be frequent, have short lead times, arrive on schedule and be of high quality. A supplier may have to deliver goods to factory as often as several times per day. Purchasing managers focus on reducing the number of suppliers, using local suppliers and improving supplier relations.

Manufacturers using JIT system generally utilize local suppliers. Firms that have no suppliers close by must rely on a finely tuned

supplier delivery system. Geographic proximity of suppliers enable the firms to reduce the need for stocks.

Firms implementing JIT system reduces the number of their suppliers considerably. This approach puts a lot of pressure on these suppliers to deliver high quality components on time. JIT users extend their contract with their suppliers and give them firm advances order information. In addition, they include their suppliers in the early phases of product design to avoid problems after production has begun. They also work with their suppliers, vendors to achieve JIT inventory flows throughout the entire supply chain.

7. Flexible Workforce: Workers in a flexible work force can be trained to perform more than one job. When the skill levels required to perform most tasks are low, a high degree of flexibility in the workforce can be achieved with little training. In situations requiring higher skills levels, shifting workers to other jobs may require extensive, costly training. Flexibility can be very beneficial: workers can be shifted among workstations to help relive bottle-necks as they arise without resolving to inventory buffers — an important aspects to uniform flow of JIT system. Multi-skilled workers may do the job of those who are on vacation or who are absent due to sickness.

8. Line Flow Strategy: A line flow strategy can reduce frequency of set-ups. If volume of specific products are

large enough(mass production), groups of machines and workers can be organized into a products lay-out to eliminate set-ups entirely. If volume is insufficient to keep a line of similar products busy, group technology can be used to design small products lines that manufactures, in volume, families of components with common attributes. Change over from components in one product family to the next components in the same family are minimal.

9. Automated high quality: Automation plays a big role in JIT system and is key to low cost production. Money freed up because of JIT inventory reduction can be invested in automation to reduce costs. The benefits, of course are greater profits, greater market share or both. However, automation should be planned carefully.

10. Preventive Maintenance: Because JIT emphasis finely tuned flows of materials and little buffer inventory between workstation, unplanned machine down time can be disruptive. Preventive maintenance can reduce the frequency and duration of machine down time. Maintenance is done on a scheduled (frequency) that balances the cost of the preventive maintenance program against the risks and costs of machine failure.

Total preventive/productive maintenance concept makes workers responsible for routinely maintaining their own

equipment and to develop employee pride in keeping their machines in top condition. This is however restricted for simple maintenance tasks such as lubrication, cleaning and minor adjustment of the machines. Maintenance of high-tech machines need trained specialists.

BENIFTS OF JIT SYSTEM:

Some of the benefits claimed for JIT systems are:

i. Inventory levels are drastically reduced. Inventory turnover as high as 50 to 100 times per year have been achieved. The raw material inventory, work-in-process inventory and finished goods inventories have been reduced considerably.

ii. The time taken for products to get through the factory(product throughout time or production cycle time) is greatly reduced, thus enabling manufacturers to engage in time-based competitions, using speed as a weapon to capture market share.

iii. Product quality is improved and hence the cost of scrap is reduced. Product quality improves because of workers involvement in solving the causes of production problems.

iv. Because the focus in manufacturing is on finding and correcting the causes of production problems, manufacturing operations are streamlined and problem free.

v. With less-in-process inventory inventory, less space is taken up by inventory and materials handling equipments.

vi. Multi-skilled, flexible workforce brought benefits like less worker idle time, reduced overheads, fewer lay-offs due to demand fluctuation in specific product lines and increased responsiveness.

Some additional benefits of JIT system are:

Elimination of unpleasant suppliers such as those with late deliveries and unacceptable quality.

Reduction in customer-related problems. Significant improvements in quality(near to zero defects). Improvements in communication. Reduction in floor space needs due to lesser work-in-

process inventory and smaller lot sizes. Shorter lead times of suppliers, allowing them to respond

more quickly to changing customers needs. Improvements in employee morale due to higher employee

involvement and employee empowerment. Reduced pressure on inwards goods receiving and

incoming inspection areas.

INTODUCTION TO THE BISLERI PRODUCT:

I have visited Bisleri factory for my production and quality management project this data is primary data which help you to understand the process of production.

M.R RAMESH CHAUHAN is the vintage boss of the 250 crore PARLE BISLERI LIMITED. The brand has some 18 manufacturing locations spread across the country. The mainstream competition is in the form of coca-cola India’s Kinley, Acquafina from Pepsi foods and nestle India’s pure. Bisleri continues to lead in the Rs 700-1,000 crore organized, packaged water market with an estimated 40 per cent market share, followed by Kinley at 28 per cent and Aquafina with an 11 per cent share. In terms of volumes, the North and West remain Bisleri’s biggest performing markets, despite the brand’s sustained national-level presence.

OPERATION OF BISLERI: –The Bisleri bottled water range comprises the conventional 500 ml, one litre, 1.2 litre and two litre bottles; five litre and 20 litre jars for the home segment, and smaller packs sizes of 250 ml cups and 330 ml bottles, though in very limited numbers for now. Among all pack sizes the brand straddles, it is the one-litre non-returnable bottles priced at Rs 10 each, and the 20-litre jars for Rs 40 aimed at the home segment that are Bisleri’s bestsellers at present. While the 20-litre jar comprises about 40 per cent of overall Bisleri sales, the one-litre bottles account for

approximately 25 per cent brand sales. The main source of water is bore wells from where they get thee water. Then the raw materials required for the bottle is PET i.e. poly ethylene terephatalable. There are 250 workers working in mumbai and 3000 all over India. The production process adopted by bisleri is batch production. The time taken to fill one bottle is approximately 5 minutes. The workers work in 3 shifts which comprises of 60-70 workers per shift. The maintenance of the machines is done every month and every 45 days there is sanitation and cleaning of the machine.

PRODUCTION CYCLE:

There are mainly three stages in the production cycle:

1. Disinfection: In this stage, water is collected from bore wells which are then disinfected using chemicals.

2. Filterization: In this stage, water is passed through different filters to kill the bacteria present in it. Then, the water is passed on to the next level for filling up.

3. Filling: In this stage, the bottles are ozonated and then the water is filled in the bottles.

PRODUCTION PROCESS:

1.Quality management of water:

Raw water which is collected from the wells is stored in a tank which has a capacity to store 1 lakh liters of water. Then the water is chlorinated to kill the bacteria present in the water which is passed through 20 micro arcal filters. Then it is passed through carbon filter which is used for removing activated carbon and odor and also acts as chlorine remover. Then it is passed through 10-micron filter. Then it goes through REVERSE AUSMOSES PLANT, which contains semi-pomitable membrane which removes dissolved solids and bacteria of size 0.001 micron. It is passed through 1 micron and 0.5-micron filters. T hen the water gets ozonated and passed through SS 316 MACHINE. Water is stored in 10000 liter tanks.

2. Blowing of Bottles:The bottles in this factory are given the desired shape by the use of blowing machines. These machines blow at a temperature of 300 degrees Celsius. The machine used for the blowing purpose is known as the AOKI MACHINE. This machine has a blowing capacity of 10 bottles per minute.

3.Filling of Bottles: There are three types of filling machines, which are used for the filling purpose. The different sizes of bottles that are filed are of 500ml, 1liter, 1.2liters and 2liters respectively. First the bottle gets ozonized when it is passed through JET MACHINES. In this the bottle gets integrated and

disintegrated, it gets rinsed, and then the water is filled into the bottles.

4. Filling of Jars: The different sizes of jars are 5liters, 10liters and 20liters. The jars are cleaned manually by soap and water. Then it is cleaned with sodium hypo-chloride and virosin, which are disinfectors. When jars are passed through washing machine first it is rinsed with hot water, then disinfected and then it is ozonated. Then jars are passed on to jar fillers where it gets filled and the packing of sealed jars into boxes is done manually.

5. Laboratory Testing: Every hour samples of water that are filled in to the bottles are taken and various testing is done. First it is checked for odor if any, presence of alkanity, chlorine and calcium. The water is also checked in machines like PH METER, TDS(TOTAL DISSLOVE SOLIDS) METER, NEPHLOMETER, SPECTROPHOTOMETER AND MEASURING OF TUBILITY. They also do aerobic microbial count and pathogen testing.

6.FURURE PLANS: Bisleri have been the market leaders in India as far as mineral waters are concerned. Every time their bottle and waters are checked and rechecked for its purity. Their main aim is to stay ahead of the main rivals i.e. Pepsi and Coca Cola. Their raw material comes from reliance industries limited who are their main suppliers of the raw material i.e. PET.

APPLICATION OF LEAN PRODUCTION- BISLERI COPMANY:

1. At the bisleri production plant situated in Mumbai near Andheri East, the production line has been designed using the principles of lean production.

2. In the ‘old days’ bisleri production took up much more factory space because of lot stocks and suppliers were kept on the factory floor.

3. Now-a-days all stocks are kept in a separate a separate storage area where they are delivered just-in-time to feed the production process.

4. On the production line operative’s work with the minimum required quantity of stocks. When more are needed, production line workers use a ‘KANBAN’ signalling system to inform that they need more suppliers.

ANALYSIS

We visited the bisleri company which is located in Andheri (E). Mr. Wahid Patel the sales officer of Bisleri International. Pvt. Ltd. told us that how they supply their product to retailers in time. They told that there are many company salesman who comes in daily morning and collects some bottles, jars of bisleri and goes to the retailers shop. If the retailer is in need and place the order, then at the same time they supply the order for which the retailer has asked. The area in Mumbai where the product is much demanded is Andheri. The company salesman is the one who is link between the retailer and the suppliers. There products are always just on time.

CONCLUSION

Today more and more companies are coming up in the package drinking water market as there is a lot of scope in bottle water market as seeing the increase in Indian population. Today the people of India are very hygienic and only prefer bottle water which increases in the scope of bottle water market. By looking at the increasing demand of bottle water companies have to see that they use modern marketing strategies and also come up with trendy bottles and satisfy the wants of the consumer.

Till today bisleri company has used so many different marketing and production technologies and systems. Today the company is at its topmost level trying to expand it to international level that is because of the different technologies used by it.

Over the period of time it has reduced its cost of production and have established good reputation in the market. Because of its product, quality level, good supply chain and that is where we call it JIT. The product is just in time in the market.

APPENDIX

1. How do you supply the product?

2. What is the supply chain of the product?

3. Is the product supplied or reached to the market every-day?

4. In which area is the product supplied first and foremost?

5. Is supply according to the demand of the retailer?

6. Does the product reaches market Just- in-time?

BIBLIOGRAPHY

For the information we referred to the Himalaya Publishing House’s Production Management & Materials Management book by Prof. K. Shridhara Bhat. We referred to page no.333-361.

While working on this project we did a lot of surveys by asking people personally about the brand of package drinking water they prefer; as well as caring on survey by questionnaires.we personally visited the BISLERI plant at Western Express Highway Andheri East, visiting the plan was an experience of a life time we saw the whole manufacturing process and how the water is purified and then packed. We personally talked to the sales officer of BISLERI where he told us about their marketing strategies and how they carried on their distribution and how BISLERI is able to maintain its standard at the market. Apart from this I visited sites like— www.bisleri.comwww.wikipedia.comwww.Google.com.