In 1990 the executive manager of Daioku Company, a company that is positioning in Taiwan decide to start promoting Just In Time process. Daioku is a Small Medium Enterprise (SME), which produce different types of automobile lamps. The main problems that the company has were that the global of lambs consist of huge variety of products in small quantities. Due to the fact that the materials that making lambs change and the life cycle of lamb shrinking as well as the reduction of time from the production until the delivery. Thus, competition drives Daioku to implement JIT in order to improve productivity and reduce inventory (Gunasekuran and Lyu, 1997).
Models
The models that the company use in order to solve their problems and be more competitive in the global market was to implement JIT process, "red cards", Kanban systems and 5s framework.
Just in Time process is part of Lean philosophy and as a result a swift in inventory control from push to pull systems (see Appendix 1). Just in Time system improves the whole organization's performance by aiming conflicting lower cost in higher quantities and a more flexible manufacturing (Slack et al, 2010). Generally, concerned to produce the required quantities of a product to the exact time. The core of JIT systems is the Kanban systems (Paton et al, 2011).
Kanban systems are the major aspect of JIT and nowadays are very famous as system, which maintain production in high levels (Paton et al, 2011). Kanban is a Japanese word for cards, which give the authority of production in downstream operations. According to (Greasley, 2008) they use cards as a signal when the production needs to start. When no signal exist means that there is enough stock (see Appendix 2).
Five S is a framework that implement standardization into the company and motivate employees to improve performance (Prabowo, 2002) and working space (Slack et al, 2010).
Application of the Models
According to Ferdows and de Meyer (1990) every company needs to set a strong base in order to be independent and flexible. In the sand cone model Just-in-Time systems have to applied in a company where this base exists because it is a system for efficient operations (Schroeder et al, 2010) (see Appendix 3).
The philosophy of JIT can be implemented from all the kind of companies and independently of the sector that they operate. That mean that can be applied both from manufactures as well as from distributors and enterprises that offers services to other companies.
Set-up
All the companies that want to apply JIT systems must change the way that operates in their services as well ass in their production because companies that implement JIT produce batch sizes in their production (Barnes, 2008). In Daioku Company the focus was vague, but after the implementation of Kanban systems which will see above their set up times change into fast and decrease the cost at the same time.
Flow
In order to aim smoothness in their company and in the way that there operations work Daioku Company implement JIT. The key element of implementing JIT is the whole company to set their goals clearly. Daioku Company sends three of their top managers into seminars in order to understand how to implement Just in Time correctly in their company. By attending the seminars, managers had the know how to implement JIT in the company. Each of the three managers develops a plan in order to discuss the implementation of JIT in Daioku Company with the already developed techniques from seminars. In reality, managers develop a training program such as that they attend in seminars but they adopted in theirs company needs.
Furthermore, because Just-in-time is part of lean production the top managers of the company decide to change the way that they operate so the company start operate with pull systems where the customers request and they produce it (Sun et al, 2010).
Additionally, Daioku Company change the way that the assembly line was operating from S-curve to U-curve in order to be more efficient with Kanban production system (see Appendix 3). Kanban systems in Daioku Company simplified the job of the employees, increased their effectiveness and reduced the production time.
Quality
With Just-in-time systems companies operates faster by holding low amount of stocks but in order to do it efficiently need to have quality control systems something that Daioku Company does not have it. In order to sustain smooth approach flow Kainzen approach is the most know approach, which through continuous improvement it can be made sure that the same problem, cannot appear again (Imai, 2007).
Product
Product stewardship has to do with the suitable design of the products aw well as the marketing plans of the company. Moreover at the design stage of the products the company needs to focus more in product standardization (Paton et al, 2011) something that the Daioku Company has not made.
Employees
Employee involvement and participation has been improved with the application of five s framework. The 5s framework is the footing of JIT systems in order to improve the working area of the company. The five s model of the company will be discussed bellow:
Seiri: In the first s that in English mean short, the company need to remove all the non-useful materials that the company uses from the working place. For this reason the company categorizes the most important items in the shop floor that they need depending on serviceableness in their production.
Seiton: respectively means set in order, where the company and in our case the Daioku company have to storage effectively and in a more efficient way all the materials that they use for the production of lamps so as they will not waste time trying to find the correct materials.
Seiso: or in other words shine refers to the employees of the company and means that need to keep clean their working area from the materials that does not need to be there during and after they finish their work.
Seiketsu: means standardize and inspire all the employees of Daioku Company to keep the company in a good shape meaning that the employees need to share and develop optimum practice.
Shitsuke: means sustain and is the last from the five s framework. Sustain refers to continual follow of the previous s. The last s is the most important and most of the times companies ignore it. Thus, Daioku Company allows their employees to have good customs and persuade them to not break the rules.
(Slack et al, 2010).
Moreover, the working place and generally the whole environment of the company start operate better and there was improvements in the quality of the lamps, productivity rates as well as in safety rules with the implementation of the 5s framework. In addition, with the implementation of the model employees start helping each other in order to become better and better over time
At the same time as part of the employees training was the implementation of "red cards". The "red cards" it is a technique of Just in Time where managers applied in every area that they thought they need to improve something and they do it by putting a red card in all unnecessary materials (Gunasekuran and Lyu, 1997).
Suppliers
Working with suppliers it is related in most of the times with delays in the deliveries. In the case of Daioku Company suppliers start implementing their work, as the company wanted them to send small quantities of materials right on time and, also, reduce the overproduction.
Conclusion
After one year of implementation of 5s, red card and Kanban systems the activities became routine for all the employees of the company and the results was better than they expected. At the end of the first year Daioku Company by implementing Just in Time system achieve to reduce the amount of inventory as well as the number of the workers with multi skill activities. The inventory of work in process fell from thirty millions to five millions NT. The parts inventory dropped from one hundred thirty millions to sixty and the workers for 580 decreased to 520. Last but not least the Daioku Company growth rate increase from 5 to 10 per cent. That is a proof that Just in time can be applied in small medium companies and successfully because in the case of Daioku reduce manufacturing costs and with better quality at the same time.
Moreover, the company needs to take under consideration the implementation of one framework that will monitor and evaluate the performance of JIT as well as the type of training that each employee needs. Furthermore, Daioku Company needs to implement more Total Quality Management (TQM) techniques in order to be more efficient, to have bigger improvements through the techniques and to be in a position to survive in competition (Goetsch, and Davis, 2010). A famous TQM technique that will be useful is Kaizen, which is a Japanese word, and it is an approach that can reorganize something better and remain efficient (Titu et al, 2010).
Reference:
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Ferdows, K. and De Meyer, A. (1990) "Lasting improvements in manufacturing performance, Journal of Operations Management, 9(2), p. 168-184.
Goetsch, L., and Davis, B. (2010) Quality Management For Organisational Excellence: Introduction to Total Quality. 6th Edition. Upper Saddle River, New Jersey, Prentice Hall.
Greasley, A. (2008). Operations management. Los Angeles, Sage Publications.
Gunasekaran, A. and Lyu, J. (1997) Implementation of just-in-time in a small company: a case study. production planning & control, 8 (4), p.406-412.
Imai, M. (2007). The Kaizen approach to Quality, 5(1), p. 1-4.
Paton, S., et al. (2011). Operations management. London, McGraw-Hill Higher Education.
Prabowo, N. (2002). 5S: Workplace organization and standardization.
Schroeder, R. et al. (2010) The cumulative capability 'sand cone' model revisited: a new perspective for manufacturing strategy. International Journal of Production Research, 1 (1), p.1-23.
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. Harlow, England, Financial Times Prentice Hall.
Sun, Y. et al. (2010) Strategic Factor-Driven Supply Chain Design for Semiconductors. California Journal of Operations Management, 8 (1), p.31-43.
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APPENDIXES
Appendix 1
Figure 1: Paton et al (2011)
Appendix 2
Figure 2: Paton et al (2011)
Appendix 3
Figure 3: Paton et al (2011)
