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Starts in factory
Production plan based on demand forecast Material procurement to meet production plan Material receipt and inspection Storage of materials and components till required for processing Actual production in various process stations with stress on maximizing production ...Contd.
Storage of components required for assembly Assembly , final inspection and packaging Storage of finished goods in company godowns and zonal depots On the shelf in retail outlets.
Ends with the customer Since the product is pushed from factory to the customer, this system is also known as PUSH system.
Risk related to forecasts. Long overall business process cycle. Good comfort level at various stages leading to slack in the system. It hides the problems, waste and obstacles in the business flow. Encourages departmental focus as their efficiency is judged on the basis of output. (departmental enterprise) Pushes up costs and affects competitiveness..
Developed in Japan by Toyota Motors. Challenged fundamental concept of economies of scale. Revolutionary approach by reversing the sequence of production cycle.
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It aims to reduce the time line by reversing the sequence of activities and eliminating non value added operations.
Order acquisition by marketing Production planning Just in time receipt of material Pull system of production down the entire process chain by kanban, a control tool starting from sales dispatch section. Ends with primary producers Since the customer pulls the product, it is also called pull system of manufacture.
Why LMS?
Varying needs of consumers even in the same customer segment Rapid changes in technology and development of new models Smaller orders from distributors to: a) reduce stock of unsold items to save on inventory cost b) prevent degradation and obsolescence in storage c) Intense competition due to globalization
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2.
Just in Time (J.I.T) Value stream mapping and analysis Establish a flow of value by eliminating non value adding activities Create a pull.
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Process optimization Improving conversion efficiency of material. Reducing consumption of indirect material and energy. Action to shorten cycle time by reducing set up time and operational time. Documentation of optimized process and its strict implementation.
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TPM To prevent equipment related losses viz., Break down loss Set up and adjustment loss Speed loss Defective work loss
Eliminate cast system among departments Establish internal customer focus Encourage information on problems To ensure that all business operations are carried out as a relay race.