UNIT -IX

PRODUCTION PLANNING AND CONIROl

Planr,ing and control are the two important components of the management process. Planning involves
the consideration of all inputs variable to achieve defined output goals. Control involves the corrective
actions taken when the actual9ytput varies from the.d~siredqneby bringing the actual output in line
with the planned output. c"

Production planning. in particular, would therefore consist mainly of the evaluation and determination of
production inputs such as labor, machinery and materials to achieve the desired goals.

1. Defining objectives and setting priorities to attain them

a) Studying the environment external to the system being planned

b) Studying the environment internal to the system being planned

2. Determining the realizable targets

3. Gearing the inputs to achieve these targets.

PRODUCTION PLANNING AS AN INTEGRAL PART OF

THE CORPORATE PLANNING PROCESS

The following figure depicts the planning process for a corporation. It can be seen here that production
planning is an integral part of the total corporate planning effort. Moreover. the production plan flas
•
feedback links upwards, modifying the targets when necessary

In a production system, the planning and control are traditionally involvec into four basic tasks:

i) Forecasting.

ii) Process planning and routing.

iii) Scheduling and dispatching.

Iv) Expediting.

In recent years, planning and control has become increasingly complex owing to large number of
complex machine-tools, a wide variety of products. etc. In addition, the need to control more closely the
cost of capital expended for prJductlon machinery and in-process inventories has placed a much
greater importance on the performance to these sub-systems. However. the introduction of computer
Into the production system has g!eatly eased the situation and thus, the computers have increased the
ability to control such complex manufacturing. To execute such complex system. a firm/de,finite
management information systerr is desired. These systems pnmarily serve the functions to automate
the existing tasks, mainly in accounting area. to provide middle and upper level of management with
current data regarding
the performance of each
What is/a~e the purpose/s for the
sub-system. More
existence of our organisation?
recently, attempts have What are the priorities in these
been made to integrate purposes;

planning and control

strategies into these
What are the present
management information What are the internal and Mure opportunities?
systems. As
stre'1gths and (I What are the threats to .
weaknesses? ;:ltie'organisation?
planning and
have become a
task. Therefore,
general types of
and controlling
are considered.

A long
planning acf
the end-pr'
level cov
more tha
y~ars.

A
long
planning
short
planning
consider-both the-
end-prOdUct ..and
individual
com p 0 n e"n t s
covering a period
upto 3 years or
slightly more.

A short term
operational
planning at part-
level covering a
period upto 2
months.
 Produc;.tion Control: Production Control is the updating and revising procedure where, according to the
'requirements of implementation. the labor assignments. the job prioritie3. the line speeds. the production
routes. etc. may be revised. It is basically a corrective mechanism which goes on throughout the
iinplementation process.

In order to continually monitor the progress of implementation many control techniques such as Grant
Cha~s. line of Balance, PERT/CPM, etc. may be used. Essentially these are bar-charts. with the later
two showing some sequence relationship.

Functiqps of Production Planning and Control: Production planning and control is normally assigned
two sets of functions: i) Regular functions and ii)Optional functions.

Regular functions are those which are generally assigned to PPC in most of the organizations though
the importance of the function may vary from industry to industry.

Optional functions arethQse which may be assigned to ppe depending upon

of the firm. , ;~-'_'c·
~:,:1'·,'3::
'.':',,;;0

The details of both the, egories of functions are given below in the
I ,", ,', .... '.<, ".

Regular FunctionsOp*i()nal Functions

1. Order preparaijons.i~~!~deactivities like making wor!< Cost estimationcon~~tV~preparation of pre-
orders. convertingf~~qrk orders into shop ()rder~. production cost estirn~i7~JO be used by Sales
preparing auXin~.., "'. rs. and releasing such orde~Y Departmentfor quotatl~vpurposes.
}",-t _,c~.,-,<
to those con~rn~d. uthorize their activities
,>·",';':----b~i,_:'<, . ._·
2. Material controli~Q~ll1s preparation of material~!i Work measuremel1t~~~rns fixation of time to be
estimates. inq~n~nQ:in9r-stockmaterials.asce$iQing allowedto a qUalifieCl;.~9r1<rnan
to carryout specific
availability of :rnateQ~I~purchasedto stock. contin!)91 task, uqder specifi.~~~~ditions and at the defined
fQIlow-upWith:pu~~andstqres for til1l(!1y receiet9f; level of performan~.~~~ measurement employs
materials: an¥ ad'.·~· st~r~ to all~te reqUi(~" scientiijf' well-kn~Vmib~niqUeS like time study.
qu,;mtitiesor availa. aterlalsagainst specific shOp work sampling, stalld~~d.data. production study,
oroets. ." analytical estimating'E!tq. . .

3. Proc;essp'anningor;.fu~l}g 99ncemsfixationof method Sub-contractconcerns offloading of certain work on

of manufactureoperationsand their sequence machine outsidevendors for economic reasons or to support
tool ...
for eachope~n, jig~ and fixtures measuring· the existing manufacturing facilities.
Instruments etc. to enable shops to produce goods of
right quality at the lowest cost.

4. Tools control concerns preparation of estimates of Capacity planning concerns estimation of

cutting tools. gauges and measuring instruments.
I requirements of men and machines as the basis of
fixtures etc indenting non-stock tooling. follow up with
tool room for timely manufacture of jigs and fixtures
and periodical replenishment of worn out non-
consumable tools.
5. Scheduling concerns preparations of machine loads,
fixation of calendar dates of various operations to be
performed on a job. coordination with sales to confirm
delivery dates of new items and periodical preparation
of dispatch schedules of regular items.
decision making to meet firm's increasedvolume of
business.
Demand forecasting concerns making projection of
company's product market. Though long term
forecast are given by sales department, short term
forecasts required for material planning, machine
loading, subcontracting etc. may be prepared by
PPC department.
Integrative Nature of Production Plan: Production planning and control is an effort to optimize the
process of conversion of raw materials Into finished products required in the market. Since various
activities are involved in the conversion of raw material into finished goods, PPC has to be an int~grated
function if the organization has to derive maximum benefit out of planning. The following figure shows
various functional departments which influence planning for operations.

}l"
PPC and Rel~tedFunctions
\,:;

IMPORTANT au
;~, .••. :y,!
0.1. planning"and<control? .

0.2. production planning and control?

1. S N Chary, Production and Operation Management.

2. 8.S Goel, Production and Operation Management.

 UNIT - X
AGGREGATE PLANNING

Aggregate planning involves planning the best quality to produce during a particular period of time (often
3months to 1 year) and planning the lowest cost method of providing the adjustable capacity to
accommodate the production requirements. For manuf8cturing operations, aggregate planning involves
pl'anning workforce ~Jo raprk week}aQd . Is. I

he,;:\plansshould .r the portion of

041d be within the fir,f~nClal.and physical
:::.:';- ,j,%'::",.: _'-":~\!i:-::f'" .,\1,;:r:
ei,firm shoul~,,!.~im
. wh.ich will forgl~rs
ssible and p6§J$
...
kept"~~~'ow as possible.
';"\',', :; '.':-"
,:~-/,-

2. To increase 'geaf alternative!) of capacity use that can be

;~~~/~~~~'j::.~>: A"':' r~:;::',
of the firm,:
i ..•..~'j!Jr~,i lU%;
ejtPJif!AG!W ·pLitJwG
:_-;~'::}l":'~,\',\\.:?,\v-:':{\;':,~~f:~"':':;_~', -", "C_":I*~'~.':' ~___ _,:_' ':c:,

1. It provides fyl (jed;I@C?ilities n,gmi

}),::i(,':;i;f:j;-':':,:.< ",""".'
a '*f.t.':'::,,:';'.',
~p~pverloadingand !:In
",',<,:\[
costs low.•.•••.•.
",.
;'i;.. ".':'!!:
{,-,".;""r' .
li.~'_
;":::";_;:";~;::":':"',',.::" ,;!It:',::'.,,,;~:\;,,,, ),", , "'-";:'':' ,', ,,'","": "" ',' ',/~i;;:;,:
iPni~~~~gjtYii~f~~~Vid~~~~o0eet expected. aggreg~

In'times of sc~r:2e'produJi~n re~~~rces,g;~j~g the maximum outPut7drth'~ amount of resources

is enhanced.

To manage change in production management by planning for production resources that adapt
to the changes in customer demands.

. a) Prepare the sales forecast for each product that indicates the quantities to be sold in each time
period (usually weeks, months or quarters) over the planning horizon (6 to 18 months).

, p) Sum up the individual product or service forecast into one aggregate demand for the factory.

c) Transform the aggregate demand for each time period into labour, materials, machines and
other elements of production capacity required to saTisfy aggregate demand.
d) Develop alternative resources schemes for supplying the necessary production capacity to
support the cumulative aggregate demand.

e} Select the capacity plan from among the alternatives considered that satisfies aggregate demand
and best meets the objectives of the organization.

c) Costs of hiring and laying off worKers

d) Costs of excess inventory.and backlog

Costs of prqduction rate ch,anges

t"":-·;'-' "~-co:; ";c,<-\'i .. {,

APPROACHES iOA(;GREGATE PLANNING:!f~'::b;

l~t!
..
-:;ji .' . . '. .~0;fh.)?
Top Down ~g~~!atePlanning : With this.approach, the desirable~~~t~llplan is developed for
the periods~1ft.t6~{plal'lning horizon, with the plan for the first few periods being fairly firm. This
"y __
~~'~,>-,,:,.>:~;_t."'lf~{;:J/ ,i,C';.'
,':C,' ,\ ~":i_Y!i:,:il,~j . ,,'-::- ':':

approach r~J~'~jth.~assumption that if the;proper amount of total caF~~ity is available, the right
amount of cilp~~rtYfor all of the parts will'be available.¥1\~"'::
';--w' ~.- .~.': ."',,' ,- _ '~':-::.;:<t '. ' .
~~~;:-:!-"-;:;:-:)(-:;"i;-'".-> .... _ .., . ,:, . '," .,- ; _,,':. . ' J~i·;,'t,~
Top Down ~~Pf~~7~isperforme~ i~ termgqf-a.pseu~o-pr~ductWhi'1!!i!~,afictitIOus pro~uct t~at .
represents '.~~~ra~~ characteristiCS of t~e e~t1repro~uct line to be g~~I"IEtq.,However difficulties
may arise isa,ggr.~fJating if the productimix variespvertime an~ th,~!;~ifferent products require
different p. efiort'resources.; :,~; ",1 I I
j','i.·~{

'~;'-::::"\:,",,'>~;:"',j:,:,>':':';';':'_' ,i>,:,: ",.' ,.t'.,:,":','·:'

!.:'g~·tePI~~ni~g : This(~ al~p called. resour.ce Jeq",I~l11ent$ planning which is
j,~pOj!~nctiQrtrwiUl material requirem~nt. Both " ..a,' ndmaterials must be
available fr6~uct~to \:)E!i,madeand hence'material plans >!ltoT"~ordinated with a more
detailed pr~~~elJ;pJ~n'<f '" ......»).f'f0;,i.! I

tt~iiY;::;;'\Y";;;\ ,;' .... ..........: ,.. •. ,:i;t';j

Rough-cutli!p)}QI1:yPlanl1i,og':This is done in conjunction WitIj'thelenmtlve master production
:-"?;~i;:,:,+,.,: " ';:,
'~t';;,'::::'\:~';\':;:::t',:.:,:"",;,: ,',. ' '" '"':',"':, , ,." ::,::;:':'::7',"}'::~ "'~:;!' , '

schedule to testits feasibifitj in terms of capacity before the Master Production Schedule (MPS)
is finalized. This ensures that a proposed MPS does not inadvertently overload any key department.
work centre or machine. making tIle MPS unworkable.

There are many aggregate output planning lilodels that help planners formulate the aggreg~le outp~t
plan. The graphical, optimal and heuristic models are some of the aggregate planning models that are
discussed in the following sections.

Graphical Method: The graphical planning procedure is a two dimensional model relating cumulative
demand to cumulative output capacity. It is one of the techniques used in developing and evaluating
various alternative plans or a combination of these alternatives. The steps are as follows:

i) A graph is drawn by taking cumulative productive days for the planning time period on the X axis
 and cumulative units of output on the y axis. The cumulative demand forecast for the entire
ptanning time period is plotted in the graph.

Based on the average planning goals, a planning strategy is selected. Proposed output for each
period in the planning horizon is computed ana plotted in the same axis used to plot the demand.

T~e planned output is compared with expected demand and periods of excess inventory and
shortages are identified.

iv) The costs involved in the implementation of the plan are calculated.

v) ,
.-
The plan is modified in a way to meet aggregate planning goals by repeating the steps 2 to 4 until
a satisfactory plan is established.

Linear Programming: The linear programming model is one of the optimal models used to formulate
aggregat.lans.' The optifll~1 pl<lOfgr minilJli?ing qqsts!~ identified bY.tIle linl;arprpgrammihg procedure.
<,:::~"\' ,','\ ",':"', :t:,> "':. ",,:k/ ,,:' ":",, ')~<':" ,,'.. ,,' , ";~"'::'':"'.' ;';'·~:;>,r-;'" ~:';"i'''''f!l'~

The number of unitstO:~rprodg~~,thetC?~~1 nU01ber,qf~hifts for ~ich the~'~~:~~~Uld operate in the

planning time horizon~J'lg~;the;~mount of inventory:that has to beicarri~<.it:!~n~·:~lJbtime period are
specified by the identifi~~'·~lan. Linear programming is used to allocate scarC:E!r~§p.urces to strategic
alternatives when theC()~~of various resourcesarE!Jinl3ar functions of their9uan'" s.

Linear Decision Rule ~),¥~Linear decision~l¥j!l~re a set of equatigns. ating the optimal
workforce, aggregateo~;(! ta~~and invent9~ le~~t!forT~Ch time period in.~ orizon. Similar to
linear programming, this 'method guarantees'an optimaisolution and elimim:ltes· n or computations.
It also overcomes thEHirh~~~on;~f linear pr~~ammin~/~~'taking into accountno~-lih.;.tncost relationships.
This model determinest~~?actual costs incurred due to changes in the invent()ryl~¥el, production rate
.and workforce size and~t~·them in the form of non-linear equations. These e9LJ~t~q~sare simplified to
oi:)tairi two linear equatiofls': for production rate anQ workforce size using calculLJsfQt'minimize the total
,,'..... . .. - .... .. . .- .. "'-";;';-i.'

cost. V • .•••....• >< i. '., ....'.... .~;:~ ··i' .'~~;f'iY(~'IB

Heuristic Models :He,y~~ticrpe~rls are·basedon ~;\~torical aggregate.plarlrli~~i~ata available with
organiZations. The marla9.emeJrt~efficient mo(jet i~:a heUri$ticJl10~lwtlict'1;i~~S the regression
method to identify capacil¥requirements based on .themanagements past dec:isiO~~~The management
coefficient model is usec:lJg..gene,ra~~a set()fequa,~on~Jhat represents histori~1 RC:1~~l"ns
of a company's
aggregate planning decisions.Accumutat~d da~0rlthe firm's workforce, prodtJ91ion and inventory
decisions ~re analyzed using regression techniques. The objective is to find the regression equ~tions
that best fit the historical data. Finally, the equations so generated are used to make future planning
decisions, in a manner similar to LDRs.
 , ,

'I"""
i •

Q.1. What is the need for aggregate planning?

Q.2. What are the objectives of aggregate planning?

Q.3. What are the steps involved in aggregate planning?

Q.4. What are the different approaches to aggregate planning?

Q.5. What are the different methods of aggregate planning?

 UNIT - XI
MATERIALS MANAGEMENT

Firms invest a significant portion of their capital in materials .. Even though the range of investments
made in material varies from industry to industry, materials normally account'forabo4t 50 percent of the
total capital invested. Therefore, materials need to be managed effectively and efficiently. For instance, if
a hospital runs out of a.single item like a syringe, a seemingly insignificant item in itsinventory, it brings
most operations to a stancjstilL Besides, such shortages delay service delivery Sind increase expenses
for the firm.

Materials management does not mean stocking large amounts of materials to avoid the problem of a
shortfall ',of material. Making more investments in materials than required is highly un
I .
..•....
economical for a
firm because of the high posts involved in,storage and' maintenance. Therefore,fiqps should monitor
carefully the entire material flow process S.0 that there is.no shortage of materials, anct;they are available

.
at the right time. at the right place and in the right quantity.
. ,
Management of materials is.very significantin a firm for the following reasons: First, the cost of material
is increasing due to scarcity and increasing demand. So, the management should carefully assess the
quantity required and minimize wastage during production.

Second, reduction in expeflditure on materials can impr<:>vethe profits of a firm. Since overheads other
than material costs like labor costs and administration expenses are relatively fixecl and do not offer
much scope for' reduction. material is the only major •area for cost reduction For example, let us
consider an organization that generated sales worth RS.llakh in a given year with a profit ofRs 10,000.
Given that the cost of materials was RS.50,000, the profits of the organization increase by 25 percent
(i.e. Rs. 12,500) if the firm can save 5 percent (ie. Rs. 2,500) of its current material costs (assuming
that other costs remain the same). In this case, a five percent saving in material costs results in
increase in profits by 25 percent. The return on investment (ROil of a firm also depends on the effective
utilization of materials, as they are an important part of the current assets of any firm.

The Return on Investment (ROI) is calculated as .

ROI = EBIT I (Fixed assets + Current assets)
If a firm reduces its costs on materials (current assets), the return on investment of the
firm also increases considerably.

Third, materials management contributes to the quality of the end product or service. As materials
managemen~ covers f~e execution of functions like purchasing ;nventory control and materials handling
in a firm, the quality of. the end product is dependent on it.
Fourth, materials management aims at the preservation of important and scarce resources for future
requirements. Further, material management executives are entrusted with the job of exploring new
sources of supply and identifying the ways to ensure environmental safety.

Materials management helps accomplish the following objectives of a firm:

,. Obtain the least possible prices for materials purchased

,. Maintain high inventory turnover so that less capital IS tied up in inventory. 'i.e.help increase the
effective utilization of the firm's capital.

Ensure the availability of materials required to continue production, when there are disruptions in
supply. I

.,. Maintain cordial relations with suppliers and supplying firms.

'" Maintain records along with well-planned administrative controls and periodic audits tl1at discourag,e
corruption.
-'".,' ,','

'" Keep searC~thg for the new products and materials that can helpthefil111 run efficiently.,

Materials manage,'''':,'' t, as we find, plays a significant role in a firm by infegr'~iHg and coordinating the
flow of materials 'itl,<ttiefirm thus helping:ifi~~'ichieving its producti6h~&e:t'distrjbution ObJectives
, -,-;';',,/:. ":-i},·""
>-:.> :', ,,':i,' ,:::\: -"'1;~'f,~-:'
":"

effectively.

When we are fO.,.,ating chemical or pharmaceutical products, or are.ri1~king assemblies out of

various compone~~~fi;~E!~redealing with bunCh~d requirements of mat~ral#."[he requirement of raw
materials depends·~'.cmtHrreqUirement of prod~etion of the finished gO~S'~R'" it would be better if we
know the producr'~;'!Rf,the assen'lbly Ofm~"~,~ished proguct and a~rSjp~IY arrange for the raw
materials that go ~'~~nished products. Tryi~I'is'<~at MRP attempts lb ~~:i!'~t is a simple system of
calculating the. r •...•.•
pf the .input mat~rt~s'~f:different points of'.tiriJej:ba$~d on the' plan for
production of fini .ds. .L,tf'i'~d,?,,'v:
::f,{,',',:c,/, ,;,-",,:,'.::._' _"_"" "" : .':~"~,:,:; ",;. "., .'.~:, , '.•,." ",.,.<:,..:(" ••",';,:,:r-;;:,:,.<.:'," ,"_' •
There are no pro>'i~.jPYAlvedanywhere, pnlY t~~iderivati?n ofthe~uf~~rTlents of input materials
based on the reqUit~tnentorplan for producti6rl"pf thetfinalgoods.' ...;:it:h· I '

-}'~:j~~~~Y:_:,:":,,',,.',-"'-:·::>""
'" :i-,::.f.··"- ,.'-"',":'.:. ~' , . ';:t,

PROCEDURAL'S!f'EPSIN".MRP

Step 1 : Determi~!ift~;~Sr()ss R~~ui~ments'()fcthEt FjnishProducts:,,~'Tb~gross requirements are

the aggregate quality taken from three sources: '

(i) Period wise pending sales orders on hand.

(ii) Period wise forecast sales.
(Hi) Management decision to afterguantities derived under (i) and (ii) above to smoothen production.
':0

Step 2 : Determine the Net Requirements of Finished Products: The gross requirements obtained
in step 1 are adjusted by the available inventory of the product to obtain net requirements. T~at 'is ~

Net requirements = Gross requirements - Inventory available

Step 3 : Develop a ,Master Production Schedule: From the net requirements. for each time period
as determined in step 2, a master production schedule is prepared. It spells out the different proqUels to
be manufactured over the given span of time.
Step 4: Explode the Bill of Materials and Determine Gross Requirements: For each assembly, a
~tructuredbill of material is available and it contains the information to identity each item of the assembly
and the quality required per assembly of which it is a part.

The gross requirement of each part is ascertained by multiplying the net requirement of the assembly on
the ma$terschedule by the quantity required of the part per assembly as given in the bill of material. The
computersoftware is available, which does the computation of requirements of parts on a level-by-Ievel
b~slis(I.e. on completion of first level. it does it for next level, dnd so on).

If the part is a purchased item, the order would be placed and his would conclude the procedure. Of
course, the purchased quantity is adjusted to compensate for the expected losses due to process
rejection.

Step 6 : Determine the Net Requirements of l!e,m:iThe gross requirement~ of an item obtained in
step 4 are adjusted for the "st?ck onhand·~nd "s~~Yk.enorder".At times,ttm~¥. ound that the item
i~ over-stocked and doesqpt r~uir~ to bereplenish~d,At times; it needs~~~.·:. d/manufactured.

Step 7 : Adjust Requirell)~ntfor Scrap Allowanpe.;3,pepending upon theCriti9~li(~;!~fthe dimensions

there may be some rejeC!ion during manufactUrifl~~iCh needs to be aqcoUl'lt~~.~ . or so that correct
numbers will be available fQfqssembly. This is US~i:ll,,~;;d~ne by estjmating:the:p~~~,ntage of loss and
adding it to the netreq~i~m~pt when the item.j.~lpein~tordered. In comp~~~¥;~_~RP system, the
percentage loss is kept in the file so that it may t>¢iautomaticallyadded wh~nthejt .. is being ordered.
, .... ',' ,".. .,.... -"., ::r"K,{,,;,:, .' ... ".:. ';,'-". " .0_:. _.' '-, .;;
",':;ix'

Step 8.: Schedule Plal)lledQ.rders : Once the q(f~rltitYOfan item is det~fJ1'lj!l~~; next logical step
: .', ':'-";':':':,:_': ";':",':";;' f\~'~;\;,"
I, ' ·'i>;.c::':,:."':;:,':-:""~'
""',' " "" ':"",

is to schedule. While sch&Q~IiQ~1 manufacturing 9~91~:Jime is ti3K~ninto a~BP~!,!~!" o that extent the
.item is 'offset for delivery. Ihe:offset information'9I1t~e item can be haqfr9m,'c record for ready
reference. .

,St8p~9 : Explode th~:N~'l~el :As mentioned-I" st~P4, the entire aS$~~~ exploded at one
.time but it is .done level.•' ,.I~~~I •••
aft~r all·previo~~~;;st~~~
..havepeen G0Il'\~I~t is each level of
;explosionis followedtrr9.~;! ~~ijp ~~9-7agdthe ~~~~$,,\~~9.f'l1
5to~.art9~ep~f\l~ od again until the
entire assembly ha~.be~Q).,explodedthrough all.l~vE:}fsand qu~ntiti~s .of,!itern~: rmined and time
.phased. .. ; . 'i:"'"
\ )t.. .,.. .':
.. <,}
Step 10: Aggregate Requirements and Determine'Order Quantities: Sonie of the items may be
common to a number of assemblies and at various levels. It will be, therefore, wrong to place an order
[eachtime an item appears during explosion but wait until the demand is developed after entire assembly
of each product ha\been exploded and then aggregate the demand so that just one order can be
placed. .:'"

Step 11: Write and Place the Planned Orders : After the requirement of each item has been
determined, their purchase orders/work orders can be printed in the form ofa computer printout.

Step 12 : Maintain the Schedules : Writing the orders is no assurance that the product will be
delivered on time. Regular follow up is necessary. Expending may require to be done in some cases
until the product is ready to be delivered to the customer.
I .

Let us also review the EOO model. All of them assume more or less a uniform pattern of consumption
of material. Based on averaged consumption, the EOO model answers the 'how much' and 'when'
 Average taken
over a year

/
I I I I
Jan Feb. Mar Apr. May June July Aug. Sept.

It is interesting topoteinthEl above figure that if the material is stocked thus per EOQ, we may have
excess material in.il"l"erlt()'Y~uring February, March. May and September months when we do not need
the material at all.,· ·?<jn~pril and August we fal! terribly short of the required material. The EOQ model
tries to answer!" UEl~tigns of 'how much' and''when to stock' but fails miserably when encountered
with an erratic reg .e.O~pattern for the material.
·~.;;:";~;+:,';'c ._>:
MRP CalctIlatioll .•"An Illustration
;'>,~:;:;~:<)\::.:~;;"s:-
':~.;/'-"
h is therefore bEltt~~;td#.~IqlJlatethe requirementgf materials from the production plan of finished goods.
Let us illustrate e>can do those calculations
..··',,-.·r'·"\

. Requirements :i 56 0 30 20 0 0 70 20
Scheduled
Receipts 100
On hand 60 10 110 80 60 60 60 -10 -30
Planned
Order Release 100

Requirements 40· 100 90· ,

Scheduled
Receipts

MRP-Plywood On hand' 160 160 120 120 20 20 20 -70 -70

Sheets for
Desk-Tops Planned
Order Release 250

The above figure shows how the requirements of tables generate requirement of lower level components
such as desk-tops and plywood sheets. The scheduled receipt is due to MRP ~enerated earlier. This
 !!1aterial.is scheduled to arnve. The desk-tops calculation gives us a negative figure in the 7tn week.
Therefore, three weeks prior to it, i.e. in the 4th week, we must order for desk-tops. Although the
. requirement is for 10 units, we order for 100 units, because this IS the economic lot size. We have
combined the benefits of EOO and MRP in this illustration.

Inventory control involves usage value classification of items (i.e. ABC classification), determination of
preferred quantities to buy/manufacture (economic lot size), fixation of lead-time and safety stock
needs, and fixation of inventory levels (re-order levels, maximum levels etc). Inventory control technique
is best stJited for low value indirect materials, which are economical to procure in certain pre-fixed
quantities as well as high value items, which are desirable to be reViewed and relished at pre-fixed
intentals, say every month.

Other Operations Research Techniques: Other sophisticated operation research techniques used
in materials planning include,

• Linear programming.
• Decision Theory (including decision trees).
• Simulation.
• Dynamic programming.
• Time series Analysis (Regression Analysis. Decomposition of Times'eries etc.)

Su~mary : Materials planning is the determination of the requirements of l1"laterial~iand ensuring their
availability in the right quantities at the right time. It is influenced by a largenum~er of external and
internal factors. Techniques of materials handling are: Bill-of -Materials/Explosiopcharts, Materials
Requirement Planning (MRP)

0.1. What do you understand by material requirement planning?

0.2. What is the necessity for material planning?

0.3. What are the steps in material requirement planning?

0.4. What factors influence material requirement planning?

,
0.5. What are the techniques for material planning?

1.' ' S N Chary, Production and Operation Management

2. B.S Goel, Production and Operation Management

 UNIT - XII
JUST IN TIME

The Just-In-Time (JIT) manufacturing system is a planning system for manufacturing processes that
minimizes the availability of material inventories at the manufacturing site to only what. when and how
much is strictly necessary. The JIT system is an integrated set of activities designed to achieve high-
volume production using minimal inventories; raw materials. work-in-process, finished goods and other
consumable goods. Nowadays many firms are successful in implementing thejust-in-tlme (JIT) philosophy
to improve their productivity by reducing unnecessary inventory and avoiding delays in the execution of
operations. .

According to the JITsy~t~rn' all components and other inventory items arrive as and when required (Le.
just before the startof~n operation). Items are picked up by the worker and fed directly into the
production process. Firms produce finished goods only at the time when they are required for sale.

The JIT system emphasizes the elimination of inventory of raw materials. work'in progress and finished
goods. Even thoughitj~$ometimes difficult to put into practice, firms target the'elimination of waste by .
the timely scheduling.()fil"lventory. .

Implementation of theJiTsystem requires the total transformation of the methods of designing products
and services. assigning:·responsibilitiestoworkersand organizing work. Today, several major companies
like Hewlett-Packard, 3M Corporation, General Electric, Harley-Davidson and General Motors use the JIT
system and are enjoying its benefits.

In this chapter, we discuss various aspects of JIT production systems. both for products and services,
and how they improvetbeproductivity and profitability of a firm.

CONCEPT OF JITSYSTEM

The concept of just- in-time states: 'nothing is produced until it is required.' As already stated. the
practice of just-In-time aims at assembling finished products just before they are sold, and in the same
way the sub-assemblies are made just before products are assembled, and components are fabricsted
just before the sub-assemblies are made. Thus the system always keeps work-in-process inventory as
low as possible; thereby reducing production lead times. '.~

In order to ensure smooth flow of materials in just-In-time systems, firms should achieve and maintain
high performance levels in all their operational areas. Organizations should maintain consistently high
quality in their products and processes. This is possible only when their various production .processes
are coordinated well. Firms can achieve such quality and coordination only with the active participation,
involvement and cooperation of all its employees. Just-in-time manufacturing is therefore based on the
concept of continuous improvement, which includes two important and mutually supporting components:
)r- People Involvement
)0» T9"talQuality. Control

People Involvement: A JIT manufacturing system requires a strong human resources management
component for its successful implementation. Firms impart the required skills to their workforce by
training th!3m in the JIT philosophy. assigning them appropriate responsibilities. coordinating their goal-
directed efforts and motivating them. The JIT system aims at the continuous improvement of the firm's
operations and minimization of wastage (or under-utilization) of human capital.

Thevefore.the JIT system encourages employees and suppliers to be innovative and make use of their
creative tafents. Firms look for the following three essential elements in its people for the successful
il,llplernentatioh of a JIT progra m:

» ~Teamwork
t Discipline

~. S~PPlier invol~~m~ ".,i.iifl< '.. :"'%fd~,~~t

.1eam~orl< :"The effeCtive'· .•. ·lvJrri~Af~f can~rise sRirit9t!~arnWOrk; they should
interact with each otHerf()·~!~entify, define and sq'YE(problems. Activitiestoyi~~g':~~ the people in an
o,rganization include ~Hgg@~~Rrprograms and qual~"Sj~~I~programs. In sug~7~M~!J"mggrams, employees
are en~ourage~ to rl)~~e~~~e$tions to improve:~~fq:ges~. In quality ~ircl~·;~1:~9~!f1worki.ng in similar
types of operations ~:~et~~!~~~UlarIntervals aqpdl~¥9Ss '1:~¥sof Improvlngt~ '. .~gf their processes.
Project teams that '.\Igr1<qr.:'.~d-hOCbasis caf1·.also;;6~fQrmed to focus on·Jh>.~I~vement of specific
in,provement target~:'\lliS}Q~refore imperativ~that!~eJIT sYs~em has anop~~:sl'it~ragement style and
anOrganization-wid'ei~~it1.l9~{Of teamwork, So that ~achell1ployee.works toimpr()Y~'~tI1e performance of
t~e ~rm by suggestil1giIllBl"pyements.t0 existing mltlhp<:ls. " ,tt~'c;'

Discipline: The op~~,ai",.;i provem§?t-dr~ven w9rk;-~.ttweqjS~~Sed SI)()qt~;:?~t;imPIY that workers

are free to implement~~a ' metho~s theYUke. 11'~te~;d;~xistlngtpr~?edUre~i~;b9~19be continued until
a'better way is suggested',;,ed anq;~pproved. Su~gestions mad~byworkers\forjmproving processes
a~e first Collected andevaIH~ted.bY.t6e mani:lgem!ptotthe firm. Theseleeteci suggestions are tested
p~;acticall~}O determi:?!~ hR~~mU9~~~~rtr;~~e~,i:jro~~sis'90~P~~~9 t.o t~~!~~Jsting. process. If .the
suggested process proves litter tha'11h~e~~qng,ohe, th~manag~§nt. appro,€e.s.itfor Implementation.
:. ''-''';." - - - _ --_~---':f-',:·_:~-,:r!i;,,,-' -i:l~: ,<~:_;,~!::_~:" .. ,,', - -_'--""::,h;;:"~;~'>,"_.--
),~t:~.':\.,']\L,':fo-:·)i':.-, _" --
Thus. firms that follow the JIT system' use the cre~tivitY1¢ofworkers in"conjunction with their teamwork
and 'discipline to produce products and services of good quality. .' "I'

Supplier Involvement :firms that practice JIT production systems require reliable suppliers who can
supply high-quality comp0nents and materials in the required quantities. Therefore, JIT firms maintain
Iqng-tenri business reladcmships with a1ew s;Jected suppliers. Firms may also invite their suppliers'
r,p~ef)entatives to participate in design review, to suggest new designs, and methods for improving
prodUct quality or productivity.

~enerallYI JIT firms have contracts with their suppliers to provide supplies of the required quality
specifications and target prices. This is done in preference to inviting competitive bids from a set of
sypplie~, The contract{~~ld be reasonably profitable to both the supplier and the JIT firm in the long
rUn. The'sl,lpplier should abide by the rules and regulations of the ,contract and supply materi~ls within
tqe time specified in the contract. The JIT firm can also suggest means, and provide assistance, to
improve, supplier productivity and product quality. The JIT firm may also wish to share its production
 ,.e! '*
'~':';:~
!' ., '

plans and schedules with its suppliers so that they can plan their levels of business and capacity
requirements, and make necessary arrangements with their vendors.

The presence of trust and commitment is very important in'building partnerships between suppliers and
.lIT firms. Such partnerships help them achieve higher productivity levels. Since the contract between
supplier and buyer is long-term in nature. the attitude of each party towards the other should be fair.
Long-term contracts provide security to suppliers as long as they are competitive and committed.
Building effective partnerships depends on four elements: trust. communication, linearity of production,
and time to make changes. The supplier should trust his customer (the JIT firm) and 'have confidence
that his customer will provide him more business and make timely payments if his requirements are
met. This makes both firms work more closely than actually specified in the contract. Communications
also play an important role in establishing a good partnership. To overcome communication prqblems.
the JIT firms can establish a buyer - quality engineer team that stays in constant touch with its soppliers.
This reduces potential miscommunication with the firm's suppliers. Suppliers should also il'lfo~the ',I
JIT
firm about new programs undertaken by them to imp/Rye qua.!itYt~U8should,~9$Nre the timely delivery of
supplies.· ..•.
•···•• ·•.•••..
<;!,i;::t~1·.;i'·
:(.~': (,~,'~'":~.

Linear production sctled~I~~relate to the development of prodLCtio~ sChed~f~~i\YitI1'~niform workloads.

Since these sChedule~~~Bute to the improvemep~.()!the firm's manufactu~ngtope~ons, the supplying
firms should tailor t~7i~~;s,~~dules to the JIT ijW1'.~i;,needs. MaintajningliPr.~uction scf1edules ~
requires the identificatl~n'~?delimination of production bottlenecks, balan', •...•. ~e?~~oductionSystem.
and reduction in setuptirnt'!.JITfirms should also provide enough time to th~~'~~PPli~rs so that they can
respond to changesindernand. Sometimes. suppli~rs have to purchas~\I.~~ 'V~terials. add more
machinery and equipl11emt;'hire and train labor, etc. fine with the requirem~nt$'oftHe JIT film. in
- .. :' ... - :'0, .-'-"':':,:,,'; :<.L ' -'.: ,',.:., :-:"::il~f~',:'~;~~\;,r'
::':'"J;.:~'t:-' I

Total Quality contror:ft~~~qualityqf;apr09~~~.i~}jts ability t9 serve' " ti.~~ the needs of its
customer. To producehig~~rllty produets, JITfinTI's~6duct.~~rveYS.deplo' ir~arketing w~rkforCe
to understand theirlcu~t~t'1;!~rlneeds~dre9~i~O'1e~ts. This;intqrmatio ~E;1for designing the
features of productsinistlc~al. way tHi:lt they'fulfill. cQstomer, needs. It. i st;:the quality control
department of the firrn~h~t;I$Tesponsible for en~~~~g!~rodq~t qH~,!~tY.
Hi~l .9~n be attained only
through the cOllectiveanpcoordi~atedeffortsiqf:all~~e' qepart~~nts 'P,):;,.'rTlJi,iFor instance. the
purchasing departmentwor~s., incqordination Wittl·th~f~Ualjtx'~mro,l dep~~~ntrnd purchases only
those supplies that meet tHe qualitYrE~quirem~nts. Th~ personn~,~(departm~'niirainsand motivates its'
','''-'0,._: ".':-:":' :,: '-':_.','. " :,"'\: ."'.'.'- .:-r;" ~.lfir~--" -.,',--~,,_,;'r:;:"'~_;',:':!O'~:',::;~;~f_~'s'l-: "'i_-;·:')'-:.:<.,_~:h:·,)'::\:~:~_'i,_,,',:
workers to produce pr?,dupt;S'()f th7 ..req9ired spe~ifjp~ti?ns~l'1eq~r'itY'Th~,;~.ncept of the 'immediate
customer', (explained below) followed by JIT firms helps them achieve the're~Uired levels of quality. I

Concept of Immediate Customer: A non-JIT firm considers a customer as a person outside the firm
who buys its products for his use or consumption. But JIT firms view customers in a different way. They
use a concept known as 'immediate customer'. Each worker in the firm considers the next work~rt~ho
continues the process of production) as the customer. Therefore it is the responsipility of the worker to·
ensure the product is processed to meet certain specifications and quality requirements bef()re{passing
it to the nex1 worker, i.e. the immediate customer. In JIT manufacturing systems, each worker istra;ned
in quality principles and testing procedures. Workers are made fUlly responsible for the work th~ycarry
out at their workstation and they are entrusted with the job of inspecting their own work. Only items of
acceptable quality are delivered to the immediate customer. -

JIT firms do not maintain separate departments for correcting defects. Each employee has to identity
and correct his or her own mistakes and send it to his or her immediate customer. Every worker
analyz~s the types and sources of errors and then develops methods to prevent them in the future. In
case a worker delivers a defective item or an improperly finished item to his immediate customer, the
worker who identifies the defect is authorized to stop the process and take necessary actions thereafter.

A'firm.tnat maintains high volumes of work-in progress inventory may end up producing a large amount
of scrap before identifying any defects. It is also very difficult for the management to identify defects
when volumes are very large. Machine conditions. tool settings, quality of raw materials. etc. have to be
checked to identify the source of the defect. Therefore. several firms now adoptjust-in-time manufacturing,
in whictf'"defects are discovered and a large production lot is produced.
,
By using JIT principles, firms can reduce wastage that arises during the production process such as the
wasleof overproduction, of time spent in waiting, in transportation and movement, in processing, in
keeping excess inventory and in defective parts. The following are some of the operational benefits that
finns derive from the use of just- in-time systems:

, Increased utilization of machinery and equipment

, Reduced investlll~nt in inventory

J;. Improvement inthe quality of product orgervice

, Reduction In space requirements of the firm

l' Reduction in prodllction cycle time

",.-.-, ,. },,-

Zero invent,ory§t,«;lrage and maintenance costs

.•·Closer rel~tlon~~i~'~ith suppliers. Reduction in formalpaper

Higher inv~lve~~~tiof employees as they ar~ responsible for of goods that they
produce. Suppliers to firms also benefit fromJIT systems. berlefiJts include:

,. A long-termg,uafanteed contract for supply of materials

.,. <.A steady and cOJ')tinllous demand for theirmaterials

>- ".Less expenditure on promotional activities

The principles of just -in-time manufacturing have gained importance in business firms as they contribute
greatly towards making a firm successful. Proper implementation of these principles results in the
production of products and services as required by customers, at the rate desired and quality expected
by them. Thus, a JIT system focuses on minimizing the firm's unproductive resources, aims at the
continuous improvement of a process and ensures the desired quality of the end-product or service .

. 111efollowing are some of the characteristics of a JIT system:

,.. Uniform workstation loads.

~ Small lot sizes
,. Closer supplier ties
'" Maintenanceof high Quality
;. Quick and economic setups
" Flexible facilities and multi-skilled workforce
;. Preventive maintenance
'" Continuous improvement
Uniform Workstation: Just-in-time manufacturing ~elps finns maintain unifonn loads at workstations.
For example, the aggregate production plan of Toyota is 24000 cars in the current month.' If the
production is carried out five days per week, 1200 cars should be produced each day. If the production
is carried out in two shifts in a day, the production line should produce 600 cars per shift. Therefore. JIT
system helps maintain uniform workload at each work center.

Suppose Toyota produces 150,200 and 250 units of three types of cars A, Band C respectively'in each
shift...There are three~~xs in whi.chToyota. S~n,r1)~ke!t~./pro~~ction~c,~r9ulr. smooth. In the .first
method, the required.quantityof apadicufar type:ofcliris~r()auced firstana,tfl~n~rcoduction of another
Z:eeryo;h~~~
is startedii~f1ti~ the seqU~nce of pr()dD2i'hg150A's,200 B:;~;rh~~~;25~t;:C's
is CO~~i~ued
in,

In the second oPtion,f~y()~~c~n adopt a methodIn~iCh a mix of variou~[m8deli;is produced in short

repetitive sequences',~g~:~~rJrequencyof repetitio9'f~~each model is in ~r~~~~io~1;!~
its demand.•Since
the production requi.tc~·;,;"·';
'S8fA, Band C are.;ip;.tn1irat,iRof3:4:5, TOy?(',; nt~?veloP a production
cycle that consists Of;~:, ,ts:.3 cars of mOdel~.4 s~rsofmodel B andj~./ .of1jnodel C. The order
in Whi~hthey are m~?;lr~d depends,on thEr~0~~t r~~~irements fO~,,~%~~~~Of car mo.deL
In thelhird option, ~~~:;ii~~developa producti?:~:~~~~:W~e Of,ttB-C-B~fu~~~S~~~~C-A-C of~~y
othe~ ,
sequence based onlTl~ffl'~t reqUirem~nts and theb~~~is'Trpeated. sucn:'~e cycle tliroug~out
a period results in'a~ng()nn workl~ad for anth~ ~btk~pt~~~in the'?>,.~!Y line and 'capacity
requirements can begr~~~IY$moothed. But thismet~c)d isfe~siple only YIIi~hlthe'~~t up times are low.
SmaULot Sizes :FiMt~,;iR~tfonOWJI~type Of;~nUf~ctu~~~sy~em nl, •. ;;i':'~~~tOry in thesma'lIest
possi~le lot sizes. T " ..!:Imall'lo~'~~r$~~d~~'::CYCI~ijn¥i:""""~;~xcess of inventory,
above.tthesafety st~ tween~O!'o~er~1.:iButl~a~tim~~~~~~,~,s9iheIPin ac~ieving a
uniform workload: L ./ee' , kept f()~;~lofJ~erlifueto;j~ p~~~iat'lhe
•.......•.....•...•••..•. next woifSlcenter,
whereas smaller lots h~veJowerwaitibg timesinthelproduqtionprocess .. :,< I • ~

Each work center uses standardized

, containers for each type of part, so that the work center which is
next in line can obtain them when required. Items are so placed in the containers that it is easy for the
receiving work center to inspect, count and handle the items. However, the use of small lot sizes' is
disadvantageous in terms of increased setup frequency.

Closer Supplier Ties: As JIT systems operate at low inventory levels, JIT firms require a hiih,level of
cooperationfrom their suppliers. Suppliers should be able to prOVidetimely delivery of inventorymeeting
. .' '
the required levels of quality. Therefore, the supplier should be active and..reliable, as the system
requires frequent shipments of inventory.Against this backdrop,,JirmsgeneratJ~choose those suppliers
who are located close to the plant. Firms also maintain long-term relationshil!>swith their sLlPpliersto
ensure smooth and continuous production. ---

Maintaining High Quality: Just-in-time systems aim at achieving a high level of conformance of goods
, ...!
and services with their specifications and reducing waste by eliminating scrap and rework. The JIT
 J. I

rs.,ystem~ncourages workers to act on their own to ensure the quality of work; thus, quality control
.1operates at the source itself. Whenever a quality problem is identified, the production process is
stopped, and it is continued only after the problem is solved.

For instance, the management at General Motors authorized its workers to discontinue production by
pUlling a· cord, if thtdV'facedany problem (in Japanese, this practice is called 'and on'). Even though
stopping the production line hampers the firm's production, the management of GM wanted the output to
.be of high quality. By et~powering its employees a~d making them responsible for quality, GM reduced
·the number of supervis:6rs by 50 percent.
I

QUic;k~,~d Economic Setups: Traditionally, firms manufacture their products in large lots resulting in a
lower "ijmber of machine setups. But ill manufacturing firms undergo a larger numberofsetups as they
prodllc6 in small lots. Therefore, JIT manufacturing firms require quick and inexpensive setups to
iminimize the disadvantages of having more number of setups.

>'Jhe.suCF6ssful im8,~~fl1~Q\~on9~.,~:,~ltl"s~~~rmi~\I~r~a~ly dep~ne~ntj()n its1\~~!¥to reduce set up times.

JIT firms, engage s~fi~!~~l~ ancJ,C()l'lsultants totrai'1tf;1eir wQrk~rstg red!J~~~~!4P times. Firms adopt
the following four-step prqgedure to reduce setup times: . '".' .

Analyz, EXistingt$~t~~J~rocedures : The exi~ting setup procedurei$ .......lded, normally with the
..help of,'Videotapes':f111en%~~management of th~iPfl11collects jnformationi:tr~E~~)J~~7mployeesrelating to
thei execution of th~se s.ntMPprocedures. The. pr()~dures are then analyz: .. ··g.~termine how they can
'...be improved. '.,. . .. ,;:'
, Jl ,':'. '£i:,',:{{:_::i'~:';:

!.;;Separation of Int~~~,;?'Y~;Wi:k'External~etup Ac~.jYities : External setuP'§~i ..'., ) are those that can be
·;.perforrrJEld Without~ipp·.· he curreptproductig.n prp8f3ss. The managEl~~.9~<9ff9JIT firm can improve
.;:itssetuR process b,~~~et~{~~'ngextem.91setup ac;M¥iHEl~from i....., and then developing
.internal setuJ?;f1~~·
'ia planto.perform~6~iEl~~t'"al activities, while theip:roduction process is.u~~fYlay. Thus, time in the
·prod.uc~i9n proces~?:jss~~~~i- ." ,<,:;. . ...,' \)~~ii%,\ . I
.Convertlriternal~~tl.1l\j~~,~ivitiEl~i~to External Setup Ac~iviY~~: ..Ne~.t~~~~nagement of the firO}
should try to convefttitsinteroalsetupactivities into~xternal ac;tivitie~.py c;lJa~~lngyvork methods, adding
work aids or by p~tcha~l?~ dupli~te sets oftool~pr eqlJiP'n~nt~lJheJ9~lp\Nil1g sections are some
procedures that enal~ th~;conversion of internal setup activitie~ intoexterflal setup activities:

· HeatinQ.: Instead oflih~ating materi.als before be~inning a production process (as a part of the internal
setYP).\,lllaterials can *Etpreheated outside the setup so that the actual heating activity can be finished
inle~s~tiJ1le. This Cen' ~ done by preheating the material in another vessel during the production of
1) preVio~s.,batchesinste~d of stopping the production process to merely heat it. The same type of
;. reason'jn~ can also ~eapplied to other operations like cooling and mixing of materials.

· Cleaning: Cleaning activities can also be converted into external setup activities by using two sets of
tools and equipment. Workers can replace contaminated equipment with a clean set to continue the
production process while the contaminated equipment is cleaned externally. This will result in increased
s~ed(>f!the production process.

Streamline Work : Simplifying internal activities and streamlining the work in a firm reduces setup
timeS. For example, a set of tools can be provided to each work center so that workers need not wait for
a standard tool required while another processing is going on. The use of standardized parts also
simplifies the processes and reduces setup times. For example, fasteners used in a setup process can
be standardized to the same size, so that they can be loosened and re-tightened by using a single
wrench.

Flexible Facilities and Multi-Skilled Workforce: As we have discussed before, firms that produce
the same product repeatedly can benefit by following JIT production systems Since the process of
production is repetitive, movement of materials can be minimized by placing the 8quipment in cells (a
cell is a grouping of several types of machines in which each machine performs a single operation
repeatedly) instead of keeping them in functional departments. Such an arrangement reduces the need
for materials handling equipment, thereby reducing material-handling costs. Such flexible facilities improve
the speed of the production thereby allowing quick deliveries. I '

In a JIT production system, workers must be capable of performing more than one operation. Th~ entire
workforce is trained continuously (at regular intervals) to develop a variety of skills to serve any function
the firm requires. Firms can develop flexible wo'rkforces through cross-training. worker is trainect to f:.
perform several operations rather than being limited to a single operation assigned to him. Cross-
training of the workforceahd establishing U-formceJlsmakes the production process more flexible.

Arra nging facilities in U-1o.~iand processing production activities in small lot sizes makes it easy for the
firm to identify the defe~.that occur at any stage of the production process""1"11~causes of defects can
also be identified cm.~·····"ec~ed easily. When .~..~~!~ctive item ~s found'\;~~~iJI]system stops ,the
production processJ'~() t~he defect. insteadofpontinuing to produc'li' etectl"e items and then
trying to rework therJ!l,t ork center causes a deted in the product. then " 'rk ~nters downstream
automatically stop oJ?
r,~I!-i'<'" ' \\ ~~.~

• .. '.
s and help solve the'problem. ; ,. I

C'~';:':

Preventive Mainteoanc~;···na JIT system, the breCikdown of one machine.~~.?ps.the entire production
process. Therefor ......e.f'{ has t?,be kept .in good workin~ conditio~,,~g't~~t production is not ..
hampe~ed. Firms t~,.,.,;;.:ed to,~~de~ake preventive maintenance t~'}r~Uc:"the occu~ence of
defects. The Objectix~·a't~~~v\t~ntiv~ m~lrtenanc~i~~£ replace,p~rt~ that, af~31.i~e.I(to produce defects I

rather than repairin~l': .'~ thata~~?Uring~~~Bction. W~~~ in JIT'~~nUf~~uring systems are

given the responsibJl!d •.;~',;!,:,iQtain(ngt~eir machifue~'and equipr;q~p~. They;~~~)al~?trained to s..olve or
repair c.ommon pro~l:~rn~l~~~following;are the important PrinCiPli~kndacti6~~~that.ih1prove equipment
maintenance: " . '"
~,)i'.'<"

'r Design sim~Ir'~'q~tP~Tnt~nd~taodardize r~Placeme~t~"~~~s. Thei"arietyof machines used

should be mlniinjz~d;(ifiterms6f manufacturer, model,.et~); .
L{~,::%~:~~,;~#;~H;l;,">'
'.,'.,-'j' ,,~:I"" -'. '-- '"'M\~: ;.~~'::')l1~·{t-;'
',~- '+-,',-: .•

Collect information about the frequency and causes of failure of machines. This information
helps in the efficient allocation of resources for maintenance.

);> Replace worn parts of the equipment. after periodic checks.

'r Purchase all spare parts that are necessary during repair work
~ ... ",
C.ontinuous Improvement: Firms that use the JIT system aim at continuous improvement in quality
and productivity by identifying areas that require improvement. Problems are detected before they
actually occur, and they are solved in the minimum possible time, to ensure the smooth flow ,of work.
For manufacturing operations, the percentage oJ scrap can be reduc.ed by followjng better work rpethods
and training employees. Imbalances in capacity can be eliminated by developing an appropriate master
production schedule and maintaining a' f)e~ible workforce. Relationships with suppliers should be
maintained to ensure timely delivery of raw m~terials with the prescribed specifications. Manuf~cturing