In Japan JIT systems are called Kanban, a word that gets to the essence of the just in time (JIT) concept. Kanban is Japanese for card or signal Japanese suppliers ship parts in containers. Each container has a card or Kanban slipped into a side pocket. When a production worker at the manufacturing plant opens a container, he or she takes out the card and sends it back to the supplier. Receipt of the card initiates the shipping of a second container of parts that, ideally reaches the production worker just as the last part in the first container is being used up. It was this simple card system that helped the Dana Corporation wins the 2000 National Association of Manufactures Award for Workforce Excellence. This system coupled with a few other operations management projects, is helping the company save nearly $300,000 annually. It’s also credited with decreasing inventory costs by 20 percent and reducing parts dispatching errors by more than 50 per cent at Waterville TG, the Quebec based manufacturer of sealing systems for automotive assembly lines. At the Chakan plant of Bajaj Auto (BA), work in progress never exceeds 0.2 days. The inventories are less than half a day’s. About 30 percent of BA’s vendors use the kanban card and deliver just in time making it Bajaj Auto’s most productive and efficient plant.
The ultimate goals of a JIT inventory system are to eliminate raw material inventories by coordinating production and supply deliveries precisely. When the system works as designed it results in a number of positive benefits for a manufacturer reduced inventories reduced setup time, better workflow shorter manufacturing time less space consumption and even higher quality. Of course, supplies that can be depended on to deliver quality materials on time must be found. With no inventories the system has no slack built in to compensate for defective materials or delays in shipments.
Continuous improvement and quality control
We have discussed continuous improvement previously describing it as a comprehensive customer focused program to continuously improve the quality of the organization’s processes products and services. Quality improvement initiatives however aren’t possible without having some way to monitor and evaluate their progress. Whether it involves standards for inventory control, defect rate for raw materials procurement or any other operations management area, controlling or quality is important. And it’s the responsibility of every member of the organization.
Ensuring that what is produced meets some pre-established standard.
Whereas continuous improvement programs emphasize actions to prevent mistakes, quality control emphasizes identifying mistakes that may have already occurred. What do we mean by quality control? It refers to monitoring quality – weight, strength, consistency color, taste, reliability, finish or any one of many characteristics – to ensure that it meets some pre-established standard. Quality control will probably be needed at one or more points, beginning with the receipt of inputs. It will continue with work in process and all steps up to the final product. Assessments at intermediate stages of the transformation process typically are part of quality control. Early detection of a defective part or process can save the cost of further work on the item.
Before implementing any quality control measures, managers need to ask whether they expect to examine 100 percent of the items produced or only a sample. The inspection of every item makes sense if the cost of continuous evaluation is very low or if the consequences of a statistical error are very high (as in the manufacturing of a drug used in open heart surgery). Statistical samples are usually less costly and sometimes they’re the only viable option. For example, if the quality test destroys the product as it does when testing flash bulbs, fireworks or home pregnancy test, then sampling has to be used.