JIT & TQM IN SUPPLY CHAIN MANAGEMENT

Presenting by: T.Ayyappa Naidu (m6-07) B.Naren (m6-13) B. Siva Prasad (m6-23)

JIT
Just-in-time' is a management philosophy and not a technique. Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand.

JIT Emphasis
Continuous improvement.
Attacking fundamental problems - anything that does not add value to the product. Devising systems to identify problems. Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong. A product oriented layout - produces less time spent moving of materials and parts. Quality control at source - each worker is responsible for the quality of their own output. Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes Preventative maintenance, Total productive maintenance - ensuring machinery and equipment functions perfectly when it is required, and continually improving it.

JIT Emphasis
Eliminating waste. There are seven types of waste:
waste from overproduction. waste of waiting time. transportation waste. processing waste. inventory waste. waste of motion. waste from product defects.
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JIT Emphasis
Good housekeeping - workplace cleanliness and organisation. Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is 1item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction. Levelled / mixed production - to smooth the flow of products through the factory. Kanbans - simple tools to `pull' products and components through the process. Jidoka (Autonomation) - providing machines with the autonomous capability to use judgment, so workers can do more useful things than standing watching them work. Andon (trouble lights) - to signal problems to initiate corrective action.
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JIT & Supply Chain Management- Cont.

JIT in Supply Chain Evolution

During Stages 3 & 4 JIT principles were widely used for Inventory Reductions & Improvements on Supplier Relationships.

JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Waste Reduction Firms reduce costs & add value by eliminating waste from the productive system. Waste encompasses wait times, inventories, material & people movement, processing steps, variability, any other non-value-adding activity.

JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Just-in-Time Partnerships Suppliers & customers work to remove waste, reduce cost, & improve quality & customer service. JIT purchasing includes delivering smaller quantities, at right time, delivered to the right location, in the right quantities. Firms develop JIT partnerships with key customers. Mutual dependency & benefits occur among JIT partnerships.
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JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Just-in-Time Layouts Move people & materials when & where needed, ASAP. Group technology (work cells)- process similar parts or components saving duplication of equipment & labor Work cells are often U-shaped to facilitate easier operator & material movements. JIT layouts are very visual (lines of visibility are unobstructed) with operators at one processing center able to monitor work at another.
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JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Just-in-Time Inventories Reduction of inventory levels causes problems to surface in the organization. Once problems are detected, they can be solved. The end result is a smoother running organization with less inventory investment.

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JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Just-in-Time Scheduling Small batch scheduling drives down costs by:
Reducing purchased, WIP, & finished goods inventories Makes the firm more flexible to meet customer demand.

Small production batches are accomplished with the use of kanbans a Japanese word for card. Although for JIT use, Kanban has come to mean a signal to order or release material in the production system.
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JIT & Supply Chain Management- Cont.

Kanban System

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JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Continuous Improvement (Kaizen) Continuous approach to reduce process, delivery, & quality problems, such as machine breakdown problems, setup problems, & internal quality problems.
Workforce Commitment Managers must support JIT by providing subordinates with the skill, tools, time, & other necessary resources to identify problems & implement solutions.
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JIT & Supply Chain Management- Cont.

The Elements of Just-in-Time
Just-in-Time II An extension of supplier partnerships & vendormanaged inventories. A suppliers employee is housed in the purchasing department of the buyers organization, acting as both buyer & supplier representative. This employee monitors inventory levels, places purchase orders, & participates on product design & value analysis teams.
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TQM

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TQM Definition
Total quality management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations.
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TQM is an enterprise-wide philosophy, encompassing suppliers & customers. The Elements of Total Quality Management
Focus on the Customer Meeting customer expectations applies to external as well as to internal suppliers & customers. Workforce Involvement Top management commitment. New role as facilitator. Employee Empowerment - Think out of the box. Teamwork is the quality circle concept
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The methods for implementing this approach come from the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran.

The Elements of Total Quality Management

Demings Way
1. Create constancy of purpose to improve product & service. 2. Adopt the new philosophy. 3. Cease dependence on inspection to improve quality. 4. End the practice of awarding business on the basis of price. 5. Constantly improve the production & service system. 6. Institute training on the job. 7. Institute leadership. 8. Drive out fear. 9. Break down barriers between departments. 10.Eliminate slogans & exhortations. 11.Eliminate quotas. 12.Remove barriers to pride of workmanship. 13.Institute program of selfimprovement 14.Put everyone to work to accomplish the transformation
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The Elements of Total Quality Management

Crosbys Way Four Absolutes of Quality 1. The definition of quality is conformance to requirements 2. The system of quality is prevention. 3. Performance standard is zero defects. 4. The measure of quality is the price of non conformance

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The Elements of Total Quality Management

Malcolm Baldrige National Quality AwardObjectives Stimulate firms to improve Recognize firms for quality achievements, Establish guidelines so that organizations can evaluate their improvement & provide guidance to others Categories Measured 1. Leadership 2. Strategic planning 3. Customer & market focus 4. Information & analysis 5. Human resource focus 6. Process management 7. Business Results

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Total Quality Management & Supply Chain

ISO 9000 Eight-Quality Management Principles
1. 2. 3. 4. 5. 6. 7. 8. Customer focus Leadership Involvement of people Process approach System approach to management Continual improvement Factual approach to decision making Mutually beneficial supplier relationships

A Supply Chain Quality Management System built using the above Eight ISO 9000 principles can promote improvement of operation efficiency 22 and competition advantage.

TQM Tools

Pareto Analysis Flow Chart Check Sheet Histogram

Scatter Diagram SPC Chart Cause-and-Effect Diagram

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The Tools of TQM

Flow Diagrams- Annotated boxes representing process to show the flow of products or customers. Check Sheets- to determine frequencies for specific problems. Pareto Charts- for presenting data in an organized fashion, indicating process problems from most to least severe.

Cause-and-Effect Diagrams (Fishbone or Ishikawa diagrams) used to aid in brainstorming and isolating the causes of a problem.

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 Histograms A histogram is a chart showing the number of occurrences in rank order Scatter Diagrams Scatter diagrams helps us recognize & understand causal relationships Statistical Process Control (SPC) Allows firms to visually monitor process performance, compare the performance to desired levels or standards, and take corrective steps quickly before process variability gets out of control and damages products, services, and customers

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CONCLUSION
In todays world of ever-increasing consumer demand, dense competition, and globalization, companies need to ensure that an effective quality program is in place. Consumers are demanding more and more that products meet high-levels of performance and reliability but at the same time remain cost-effective. Total Quality Management (TQM) provides for continuous improvement through formalized, methodological steps. In order for TQM to work however, organizational-wide adoption must take place. Through training, patience and determination TQM can transform a mediocre company into a world class enterprise.
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