...Journal of Operations Management 21 (2004) 613–627 From supply chain to demand chain: the role of lead time reduction in improving demand chain performance Suzanne de Treville a,∗ , Roy D. Shapiro b,1 , Ari-Pekka Hameri a,2 a Ecole des Hautes Etudes Commerciales, University of Lausanne, 1015 Dorigny, Switzerland b Harvard Business School, Boston, MA 02163, USA Received 1 December 2002; received in revised form 1 October 2003; accepted 1 October 2003 Abstract To improve demand chain performance, is it better for parties in a supply chain to focus first on lead time reduction, or instead concentrate on improving the transfer of demand information upstream in the chain? Even though the theory of supply and demand chain management suggests that lead time reduction is an antecedent to the use of market mediation (i.e., adjusting production to fit actual customer demand as it materializes) [Harvard Business Rev. 75 (2) (1997) 105] to reduce transaction uncertainty in the chain, which can be conceptualized as the primary goal of supply chain management [J. Operat. Manage. 11 (3) (1993) 289], demand chain parties often are observed in practice to begin with information transfer improvement, ignoring the problem of long lead times. In this paper, we propose a framework for prioritizing lead time reduction in a demand chain improvement project, using a typology of demand chains to identify and recommend trajectories to achieve desirable levels of market mediation performance...
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...vendors for raw material supply and the materials department is using approximately 350 vendors. Thirdly, in the existing strategy, Spartan is using unique skilled workers. Finally, poor inventory management which reflects Spartan manufacturing operations are facing material shortage and stock outs. In order to opt for new strategy, Spartan has to make many changes and this process will certainly require time and efforts. For example, Spartan has to shift the manufacturing from batch process to assembly process. This will eventually require process reengineering; the reengineering will modify the existing department structure of manufacturing process. On the other side, Spartan has to reduce the number of suppliers; selection of the suppliers would be tedious task. In the assembly line manufacturing, Spartan will need skilled employees and hence, spend on the training on existing employees. Finally, the Spartan will have to improve their inventory management in order to avoid stock out or material shortage. 2. The job shop is more suitable to specialized equipment as each order specific requirement changes individually. In the case study, Spartan is planning to manufacture standardized equipment, reducing the variety in the product line; for such type of production, flow operation is a more suitable approach. The change from job shop to flow operation...
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...PRODUCTION PLANNING AND CONTROL FOR REDUCING MANUFACTURING THROUGHPUT TIME Amey Dhar Dubey (fy7096) Arpit Sharma (fe2365) Bhavditya Sisodiya (fw6052) College of Engineering Wayne State University Detroit, Michigan ABSTRACT This paper scans the present state of Production Planning and Control (PPC) regarding the manufacturing industry. PPC needs to undergo internal and external changes by being more dynamic and properly utilizing resources and delivery performance. In order for this to happen, the concept of crashing much be applied to better understand of how different factors affect PPC systems performance. Crashing is reduces project time by overlapping or performing two or more different steps simultaneously using additional resources (PM PrepCast). Crashing the network is the reduction of project duration by contracting and compressing the network at minimum cost. Project duration can often be reduced by appointing more labours to project activities. However, when appointing more labours, the project cost increases due to overtime and more resources being used. Time and cost requirement must be balanced to reduce project duration. The gist of this paper covers production time, along with the cost applying the concept of crashing. In addition, time management with optimum cost is vital for any project. A method to obtain optimum cost and project duration minimization is outlined. This is achieved by fully crashing the critical path or by removing non-added...
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...buying decisions. Factors that affect decisions made in the integrated buying model are the cost per unit, quality level, and lead time. As each company tries to achieve their competitive advantage, the goals of a purchasing decision may vary. For example, most purchasing decisions require buying the right material at an acceptable cost and quality level within a reasonable lead time. The decision maker must consider multiples goals. As a result, the buyer is faced with several constraints. Budgetary constraints and quality level constraints can cause issues with making the best buying decision. Companies may have limited resources, budgets may not be high enough to cover costs, or the storage size may limit the amount a product can be purchased. Nonetheless, the buyer must achieve the multiples goals within the constraints. The integrated buying model is shown in figure 1. Figure 1: Integrated Buying Model The cost per unit, quantity discount schedule, and price/cost analysis are considered when making buying decisions based on cost. The cost per unit is influenced by the volume or amount purchased, the quality level desired, and the desired lead time. A company’s strategy may to purchase in bulk to buy at a discount which can drive the material costs down. A buyer must also consider the quality level in terms of the defect rate which leads to the purchase price being higher. This is known as a premium where the higher quality level which usually means preventing defects...
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...the quality and cost of purchased goods. To be competitive in a global market, a manufacturing firm, regardless of its size, must devise ways to produce quality goods at a lower cost. The JustIn-Time (JIT) philosophy has been proposed and implemented as a way of meeting this challenge. Three major tenets of the JIT philosophy include waste reduction, continuous quality improvement, and increased participation in decision making (Hannah 1987, Schonberger 1986, and Warne 1986). Successful implementation of the JIT philosophy strengthens both customer and supplier linkages. Large manufacturing firms are reporting success with JIT implementation (Schonberger 1986, and O'Neal 1987). As a result, more manufacturing firms are expected to embrace the JIT philosophy in the future (Stokes 1989). This will increase the number of small firms implementing JIT; however, little attention has been devoted to the experiences of small JIT firms. Existing literature provides only a generic description of the expected Dr. Stamm is an associate professor and the chair of the Department of Management at Western Michigan University, Kalamazoo. Her research interests include the JIT philosophy, inventory, and quality control. Dr. Golhar is an associate professor of management in the Haworth College of Business at Westem Michigan University. His research interests include decision analysis, JIT philosophy, and quality control. benefits and disadvantages of implementing...
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...TABLE OF CONTENTS 1.0 INTRODUCTION 2 1.1 The importance of Just In Time (JIT) 2 1.2 The Objectives of the study 3 1.3 The Research Methodology 3 2.0 LITERATURE REVIEW 5 2.1 The Definition of JIT 5 2.2 The Purposes of Just In Time 10 2.3 The Importance Elements In JIT Implementation 12 2.4 Difficulties and Issues Associated with Implementation of JIT Components. 23 2.5 Main Issues and Difficulties of Managerial Nature in JIT 30 2.6 The Benefits of JIT 34 2.7 The Limitation of JIT 36 2.8 The Relationship Model and Supporting Activities of JIT, TQM AND TPM 41 2.9 The Relationship between JIT Production and Manufacturing Strategy and their Impact on JIT Performance 43 3.0 FINDINGS 50 4.0 CONCLUSION AND RECOMMENDATION 59 REFERENCES 61 APPENDIXES 64 INTRODUCTION The Importance of Just In Time (JIT) Nowadays, companies used Just In Time (JIT) systems control work flow by bringing in materials and sending out goods on demand which is ideally, just enough to provide what consumers want. JIT also is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases they are zero. Companies typically hold inventory in three locations which are raw materials, work-in-process inventory of partially worked materials or sub-assemblies for workstations to complete...
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...I Introduction: Crane manufacturing industry forms an integral part of the Construction Equipment market. The Global Crane market is undergoing a radical change due to growth of the emerging economies, infrastructure industry and drive towards greater energy efficiency. According to TechNavio’s analysts forecast the Global Crane market is expected to grow at a CAGR of 7.29 % over the period 2013-2018[7]. Fig1- Regional differences, Source - http://www.khl.com/servlet/file/CHRIS%20SLEIGHT.pdf?ITEM_ENT_ID=81256 The Indian industrial crane market amounts to approx. Rs2000 to 2200 crore per annum. Majorly 70% demand comes from the private sector and 30% from the government owned companies (Saibal ray, Yigal Gerchak & Elizabeth M. Jewkes, 2002) India has few factors which would ensure the steady growth of this segment in the next few years. The increase in domestic spending on infrastructure as stated in the Budget 2014-15, increased investment from foreign multinationals would prove to be a key factor in the growth of the construction industry as a whole. ElectroMech is the largest EOT cranes manufacturer in India with Pune being the base. It commands the highest market share and is recording 50% average annual growth. ElectroMech offer precise solutions for wide-ranging applications in manufacturing plants and infrastructure projects through a complete range of Hoists and Cranes. Apart from the standard and semi standard product delivery, Electromech also offers the...
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...applying the lean approach as a cost reduction means in avoiding excess production being stored as inventory in a bid to cut down on cost. Lean manufacturing or lean production is basically a production practice that targets the identification and elimination of waste. Lean manufacturing changed the world as innovated by Toyota that is against mass production system (Taj Shahram, 2008).Taj believes lean means manufacturing without waste; here waste includes over production, waste in waiting time, transportation waste, inventory waste, processing waste, waste of motion and waste from production defects. Analyzing Methodology And Effectiveness In Identifying Problems At PD Aquarium: (1) Standard production cycle is five working days. No orders are taken over the weekend and any order received any day outside Monday automatically gets delivered the following Fridays as orders are only shipped for delivery on Fridays. On receipt of these orders from retailers, the administration clerk would check inventory and raw materials only after orders are received. Operating at lower cost to yield greater profits however customers would not be satisfied as serving the customer becomes vital means of differentiation (Christopher M, 2005, pg 11). Though the company claims to have enhanced it’s capability to produce and distribute products while lowering production costs with the lean approach this was not very evident in their meeting customer needs or production processes. (2)On inventory confirmation/Order...
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...Supply Chain Management October 23, 2014 Case Study Analysis #2 Not only has reducing waste become more important for citizens across the world, companies are also invested in reducing the amount of waste they produce. This case study examines the food wrapping section of a UK Food Company, and ways in which resources can be best allocated to improve waste management. The wrapping section of the manufacturing process is particularly important because it plays a vital role in community the image and quality of the brand. The paper is based on using the lean tools approach and also looks into other methodology including value stream mapping. The following SWOT Analysis can provide insight into this particular UK Food Company so that measures can be taken to insure a reduction in waste. Strengths: • very diverse products that can run through the same production line including bread and sushi • the food wrapping successfully improves the brand image in the consumers eyes • improved efficiency of products running through the line (after techniques implemented) • higher customer satisfaction (after techniques implemented) • lead times reduced and kilograms of waste also reduced (after techniques implemented) Weaknesses: • Irregular maintenance performed on the machines • Unclean work area for employees • Machines that are defected reduce the number of wrapped food items • Employee’s had to be laid off (after techniques implemented) • Trust was...
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...Just-in-Time Production and Lean Manufacturing Keller Graduate School of Management Spring Semester, May 2010 Session GM588: Managing Quality (online) Instructor: Robert Lee 5 June 2010 Table of Contents I. Introduction 3 What is it? 3 Background 5 History 7 II. Literature Review 9 Significance in Practice 9 JIT and Lean Thought Processes 10 JIT & Lean Thinking – General Principles 10 Advantages/Benefits of JIT/lean 10 Major Advantages/Benefits of JIT 11 Major Advantages/Benefits of Lean Productions 11 Relevance of JIT/lean in Today’s Businesses 11 Mistakes of Implementation 13 Additional Challenges 13 III. Demonstrations and Applications in the Business World 16 Survival Strategy for Business 16 List of Companies that use JIT/lean production techniques 18 Best Practices & Successful Implementation 18 IV. Conclusion and Reflection 20 References 22 Introduction * What is it? Just-in-Time (JIT) production is a set of principles applied to manufacturing and inventory to control the purchase of materials to produce units on a need-basis. JIT is set on the philosophy that controlling raw materials purchased for production to bring them into the manufacturing process as they are needed leads to cost savings and production efficiencies. JIT focuses on realizing that holding little or no inventory has economic and quality values for the organization. Manufactures receive raw materials from suppliers only to be used immediately in production, using...
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...GLOBAL SUPPLY CHAIN MANAGEMENT MO255 NIKKI WONG XIAO XUAN NORTHUMBRIA UNIVERSITY (2897 Words) Executive Summary The objective of this report is to develop Singapore as a premier global hub port and international maritime centre, and to safeguard Singapore strategic maritime objectives. Research for this report includes evaluating the application on Lean and Total Quality Management (TQM) in logistics and supply chain networks to achieve Maritime Port Authority (MPA) objectives such as quality of service, competitiveness, reliability and efficiency. The major findings shows that lean implementation improves processing times achieving more work in less staff time and bringing services up to standard. (Radnor, Walley, Stephens, & Bucci, 2006). It also changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers. Lean helps to eliminate waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects and produces a greater...
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...CONTENTS Page Table Of Contents 1 1.1 Introduction 2 1.2 The Concept Of Kaizen Costing 2 1.3 Kaizen And Management 4 1.4 Kaizen -The Three Pillars 5 1.4.1 Housekeeping 5 1.4.2 Waste (Muda ) Elimination 7 1.4.3 Standardization 10 1.6 Kaizen And Total Quality Management (Tqm) 13 1.7 Kaizen And Suggestion Systems 14 1.8 Goals Of Kaizen Vs. Quality, Cost And Delivery 15 1.9 Common Disconnects/Roadblocks In Kaizen Implementation 16 1.10 Advantages Of Kaizen Costing 17 1.11 Disadvantages Of Kaizen Costing 18 1.12 Conclusion 19 References 19 1.1 Introduction Kaizen means improvement, continuous improvement involving everyone in the organization from top management, to managers then to supervisors, and to workers. In Japan, the concept of Kaizen is so deeply engrained in the minds of both managers and workers that they often do not even realize they are thinking Kaizen as a customer-driven strategy for improvement. Kaizen is a Japanese philosophy for process improvement that can be traced to the meaning of the Japanese words ‘Kai’ and ‘Zen’, which translate roughly into ‘to break apart and investigate’ and ‘to improve upon the existing situation’. It is using common sense and is both a rigorous, scientific method using statistical quality control and an adaptive framework of organizational values and beliefs that keeps workers and management focused on zero defects. It is a philosophy of never being satisfied with what was accomplished last week or last...
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...in Time (JIT) inventory management has its benefits and setbacks which leads to the question on its eligibility to be adopted in organizations. It has some of the benefits of being cost effective and ensuring quality production. However, it faces unpredictability in the supply chain and meeting demand, both setbacks realized in adopting it. The magnitude of the benefits and setbacks can vary depending on the industry. The current study provides details on the advantages and disadvantages of employing the policy in the manufacturing industry with implementation examples specific to the car manufacturing industry. With the policy being pioneered by Toyota, and later used by Ford, the evidence that the two organizations have benefited substantially from the policy are obvious. They have had increased profits, customer satisfaction and the quality of their products. All while reducing costs associated with the storage of excess inventories, defective production, and waste. Strategies maximizing the use of a just in time policy and avoiding some of the disadvantages will also be discussed. Just in Time Just in time production first surfaced just after World War II in Japan’s Toyota Company. Modeled after Henry Ford’s continuous flow manufacturing, it focused on eliminating waste in the postwar Japanese market (Rona, 2013). Today just in time still emphasizes the reduction of waste, but also production and resource efficiency. These efficiencies are gained through reduction of...
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...oPRODUCTION SYSTEM A first possible distinction in production systems (technological classification) is between process production and part production. * Process production means that the product undergoes physical -chemical transformations and lacks assembly operations, therefore raw materials cant easily be obtained from the final product, examples include: paper, cement and nylon. * Part production (ex: cars and ovens) comprises both manufacturing systems and assembly systems. In the first category we find job shops, manufacturing cells, flexible manufacturing systems and transfer lines, in the assembly category we have fixed position systems, assembly lines and assembly shops (both manual and/or automated operations) Another possible classification[12] is one based on Lead Time (manufacturing lead time vs delivery lead time): Engineer to Order, Purchase to Order, Make to Order, Assemble to Order and Make to Stock. According to this classification different kinds of systems will have different customer order decoupling points (CODP), meaning that Work in Progress cycle stock levels are practically nonexistent regarding operations located after the CODP (except for WIP due to queues). The concept of production systems can be expanded to the service sector world keeping in mind that services have some fundamental differences in respect to material goods: intangibility, client always present during transformation processes, no stocks for "finished goods". Services can...
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...how performance differed when utilizing either strategies. Lean strategy can reduce, or even eliminate waste in the production process but lean might not be able to respond to fluctuation in customer demand while agile strategy enhance the responsiveness of the manufacturer. The results of this research show that both strategies provide different types of impact for the manufacturer. The findings also suggest that the manufacturer should not select either a lean or agile strategy but rather to combine both strategies. Keywords: lean, agile, manufacturing strategy, case study, Thailand * Corresponding author. He can be contacted at: Banomyong@thammasat.net 1 Back to "Search By Author" Background The aquarium industry and in particular an aquarium manufacturer in Thailand has been chosen in this paper as the study object for the implementation of a lean strategy versus an agile strategy. The purpose of this paper is to compare the effect of lean and agile strategies on the manufacturing process of an aquarium manufacturer. Customers demand has changed significantly in Thailand since the economic crisis of 1997, this has lead the aquarium manufacturer to adjust itself to be ready to serve all kinds of customers’ demand by enhancing its capability to produce and distribute both made-to-order and ordinary products while trying to lower production costs...
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