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TQM & JIT

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This paper consists of basic understanding of JIT and TQM philosophies, the inter-linkages between these and challenges associated in their implementation. Paper also discusses how JIT can feeds to ...

This paper consists of basic understanding of JIT and TQM philosophies, the inter-linkages between these and challenges associated in their implementation. Paper also discusses how JIT can feeds to the accomplishment of TQM. JIT and TQM are perfectly complimentary to each other. The objective of both is to expose and correct problems at source, so as to avoid wasting resources on production of defective products. Paper illustrates how TQM and JIT can enhance value for customers and at the same time can ensure higher profits for firm.

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TQM & JIT TQM & JIT Document Transcript

  • Total Quality Management & Just In Time In the Guidance of: Prof. S. Chakraborty By: Gagan Pardeep PG12 IWSB Indus World School Of Business 15A KP-II Gr. NOIDA U.P.AbstractThis paper consists of basic understanding of JIT and TQM philosophies, the inter-linkages between these and challenges associated in their implementation.Paper also discusses how JIT can feeds to the accomplishment of TQM. JIT andTQM are perfectly complimentary to each other. The objective of both is toexpose and correct problems at source, so as to avoid wasting resources onproduction of defective products. Paper illustrates how TQM and JIT canenhance value for customers and at the same time can ensure higher profits forfirm.
  • Indus World School of BusinessIntroduction to TQM and JITTotal Quality Management (TQM) Total quality management (TQM) is not a mere technique; it is a broad management approach or methodology and more than that a philosophy, dealing with processes and attitudes. TQM places quality as the primary objective for the organization, as opposed to the traditional management objective of maximizing production and subsequently controlling costs. Although, TQM was initially developed for the manufacturing environment, it can be equally applicable to any environment, which involves inputs and outputs, such as knowledge service industry like universities. Principles of TQM There is a goal of ‘Continuous Improvement’ against achieving some static level of quality. It is about approaching excellence in an incremental way without increasing cost. It considers quality as a continuous ongoing process. Quality is responsibility and mission of all. Hence all employees should be continuously trained and motivate to consistently achieve better and better quality. Even ‘Commitment of Top Management’ should be visible and clear to all. Instead of reactive and person dependent system, TQM is a ‘Proactive Systematic Approach’. This means ‘prevention and immediate detection of errors and problems at root source’ is preferred over of ‘correction for problems after its occurrence’. Responsibility for quality takes place at the source. This feature demands ‘Quality Design’ rather than inspection of quality after poor design. The essence of TQM is the simple but extremely powerful belief that it is better and hence cheaper; to do every process right at first time, rather than not to do it right and then corrects it afterwards. Doing things right at first time requires no money. Doing things wrong is what only costs money, as allowing defective products to get produced wastes time and resources. Thus, longer it takes to identify problem, more will be the cost incurred to correct it. TQM is systematic way of guaranteeing that all activities within an organization happen as planned. It is the management attitude that concerns with preventing problems at source, rather than allowing problems to occur and then correcting them afterwards. New and old cultures Comparison: Quality Element Traditional TQM Definition Product Oriented Customer Oriented Priorities Second to service and cost First among equals of service and cost Decisions Short term Long term Emphasis Detection Prevention Errors Operations System Responsibility Quality control Everyone Problem Solving Managers Teams Procurement Price Life cycle costs, Partnership Manager’s Role Plan, assign, control, Delegate, facilitate and mentor coach, and enforce Total Quality Management & Just In Time
  • Indus World School of BusinessBuilding blocks of TQM: Purpose; Product; Process; Procedure; People (The 5Ps),management systems and performance measurementEverything we do is a Process which solves a purpose through a product (in fact all a customer needis a service/benefit which he/she derive from that product). Every process transforms a set of inputs,which can include action (performed by a set of people), methods and operations into the desiredoutputs which satisfy the customers’ (internal or external) needs and expectations. In each area orfunction within an organization there will be many processes taking place, and each can be analyzedby an examination of the inputs and outputs to determine the action necessary to improve quality.TQM is management and alignment of all the inputs depicted in diagram, in a direction that maximizethe value for customer.The only point at which true responsibility for performance and quality can lie is with the People whoactually do the job or carry out the process, each of which has one or several suppliers and customers.An efficient and effective way to tackle process or quality improvement is through teamwork.However, people will not engage in improvement activities without commitment and recognitionfrom the organization’s leaders, a climate for improvement and a strategy that is implementedthoughtfully and effectively. Figure 1TQM creates, encourages and nurtures simplicity, instead of bureaucratic approach of addingcontrols. It attempts to identify and eliminate non-value-added activities thus naturally motivatingpeople to use quality procedures. Total Quality Management & Just In Time
  • Indus World School of Business TQM attempts to expose problems rather than hide or burry them. ‘Just in Time (JIT)’ helps us to understand more on this. TQM identifies and addresses causes of problems, not effects.Implementation of TQM TQM starts with a vision in mind which requires commitment. The whole process is displayed in following diagram. Figure 2It includes following steps -Commitment Quality control  Vital for TQM  Coordinates all corporate efforts to TQM  Should be visible and by example  Members from each unit of the company  Should be transmitted to each employee  Develops strategic plans  Ultimate goal: satisfy customers!  Addresses key questions for  May need selling arguments implementation  Responsible of the TQM Mission Statement Total Quality Management & Just In Time
  • Indus World School of BusinessEducation Organization  On the business’ own interpretation and Using the company’s structure an Using the implementation of TQM company’s structure an organization for quality  Will require continuity should be developed based on:  Needs to define who, what, how, how much,  Objectives and who is responsible  Delegation  Re-education is necessary education is  Accountability necessary  Achievement measurement  Efficient communicationQuality cost measurement TrainingMethods to measure, document and analyze the cost  What is the difference between Educationof quality are required and Training?  Thorough learning of tools and techniques for quality improvement techniquesQuality improvement teams (QIT) Investigation and corrective actionsFunctions:  Characteristics To reach the targets, the QIT should set a system Implement unit Intradepartmental of: TQM  Membership is open  Procedures Solve problems based on knowledge  Forms identified by goal of the operation  Documentation setting  The leader should Address local issues know the business  Membership is finiteQuality Audit AwarenessFeedback mechanism of TQM conducted by the  Continuous communication about thequality council or senior managers TQM status and advancesGoals:  Employs communication tools  Verify reported quality improvements  Compatible with the company’s culture  Verify the achievement of goals  Confirm that improvements match targetsRecognition  Achievements of individuals and groups should be made public  Financial rewards should be included Here we can see it is a continuous process and one has to keep learning and making amendments continuously.Just-In-time Just-In-time or JIT, is a management philosophy aimed at eliminating manufacturing wastes by producing only the right amount and combination of parts at the right place at the right time. It is also that ‘Just in Time (JIT)’ enforces ‘Continuous Improvement’ by continual reduction of non-value- added inventory stocks to lower and then further lower levels. This is based on the fact that wastes result from any activity that adds cost without adding value to the product, such as transferring of inventories from one place to another or even the mere act of storing them. The goal of JIT, therefore, is to minimize the presence of non-value-adding operations and non- moving inventories in the production line. This will result in shorter throughput times, better on-time Total Quality Management & Just In Time
  • Indus World School of Businessdelivery performance, higher equipment utilization, lesser space requirement, lower costs, and greaterprofits.JIT was developed as a means of meeting customer demands with minimum delays. Thus, in theolden days, JIT is used not to reduce manufacturing wastage, but primarily to produce goods so thatcustomer orders are met exactly when they need the products and in result create a pull of demand forproducts rather than loading distribution channels with excess products. Another important aspect ofJIT is the use of a pull system to move inventories through the production line. Under such a system,the requirements of the next station are what modulate the production of a particular station. It istherefore necessary under JIT to define a process by which the pulling of lots from one station to thenext is facilitated.JIT is also known as lean production or stockless production, since the key behind a successfulimplementation of JIT is the reduction of inventory levels at the various stations of the productionline to the absolute minimum. This necessitates good coordination between stations such that everystation produces only the exact volume that the next station needs (immediate customer of output).On the other hand, a station pulls in only the exact volume that it needs from the preceding station.The JIT system consists of defining the production flow and setting up the production floor such thatthe flow of materials as they get manufactured through the line is smooth and unimpeded, therebyreduce material waiting time. This requires that the capacities of the various workstations that thematerials pass through are evenly matched and balanced, such that bottlenecks in the production lineare eliminated. This set-up ensures that the materials will undergo manufacturing without queuing orstoppage.JIT is most applicable to operations or production flows that do not change, i.e., those that are simplyrepeated over and over again. An example of this would be an automobile assembly line, whereinevery car undergoes the same production process as the one before it.Some semiconductor companies have likewise practiced JIT successfully (e.g. Dell). Still, there aresome semiconductor companies that don’t practice JIT for the simple reason that their operations aretoo complex for JIT application. On the other hand, that’s precisely the challenge of JIT – creation ofa production set-up that is simple enough to allow JIT.With JIT, it is believed that the root causes of most problems are due to faulty production processdesign. Hence, with JIT, nothing is taken for granted, everything is subject to analysis. Each activityis identified as either ‘Value-Added’ or ‘Non-Value-Added’. The reduction of ‘Non-Value-Added’activities is achieved mainly through increasing manufacturing flexibility and improved quality.Inventory stocks allow production process to continue even when some problem occurs. In a way,inventory stocks act like a buffers to hide any problem that may occur. But, with JIT, there are nobuffers to hide problems and thus, occurrence of problem can shut down the entire productionprocess. Thus, JIT philosophy helps organization to prominently expose problems and thus, bring aclear focus on removal of it at source, by eliminating the cause, rather than effects, of problem.JIT is an extremely powerful tool to identify where improvements should be made. It helps you toidentify cause (not the effect) of problem and its elimination. Failures and exceptions are treated asopportunities to improve the system. In fact, JIT initiates failures due to problems to expose them. Itis a system of trouble-shooting, within a culture of constant analysis and improvement. It is clear, asan attitude and approach, JIT and TQM are perfectly complimentary to each other, to expose andcorrect problems at source, so as to avoid wasting resources on production of defective products. Total Quality Management & Just In Time
  • Indus World School of BusinessEvolution of JIT JIT finds its origin in Japan, where it has been in practice since the early 1970’s. It was developed and perfected by Taiichi Ohno of Toyota, who is now referred to as the father of JIT. Before the introduction of JIT, there were a lot of manufacturing defects for the existing system at that time. This included inventory problems, product defects, risen costs, and large lot production and delivery delays. The inventory problems included the unused accumulated inventory that was not only unproductive but also required a lot of efforts in storing and managing them. Other implied problems were parts storage, equipment breakdowns and uneven production levels. For the product defects, manufacturers knew that only one single product defect could destroy the producer’s credibility. They must create a defect free process. Thus began the search for the system that could bring about a turnaround. Springing from Japans post World War II goal of full employment through industrialization, Japanese manufacturers imported technology to avoid heavy R & D expenditures and focused on improving the production process. Their aim was to increase product quality and reliability. Taiichi Ohio established Toyota as leaders in quality and delivery time through the implementation of JIT. This position was gained due to a commitment to two philosophies- elimination of waste and respect for people. Japanese developed what we today understand as Just-in-time, through intensive government supported work, and intended to improve their then inferior industries. Their programmers began by learning existing techniques from experts such as Deming and Juran. The characteristic of Japan like restrained spaces, no natural energy sources, no mineral wealth put it under pressure and appears to have banished complacency.The Goal of JIT The prime goal of JIT is the achievement of zero inventories, minimal work in progress not just within the confine of a single organization, but ultimately throughout the entire supply chain. There are three main objectives.  Increasing the organization’s ability to complete with others and remain competitive over the long run. The competitiveness of the firm is increased by the use of JIT manufacturing process as they can develop a more optimal process for their firms.  Increasing efficiency within the production process. Efficiency is obtained through the increase of productivity and decrease of cost.  Reducing wasted materials, time and effort. It can help to reduce the costs. Other objectives of JIT: Identify and response to consumers needs: Customer’s needs and wants seem to be the major focus for business. This objective will help the firm on what is demanded from customers, and what is required of production. Optimal quality cost relationship: The organization should focus on zero defect production process. Although it seems to be unrealistic, in the long run, it will eliminate a huge a huge amount of resources and efforts in inspecting, reworking & the production of defected goods. Develop a reliable relationship between the suppliers: A good and long long-term relationship between organization and its suppliers helps to manage a more efficient process in inventory Total Quality Management & Just In Time
  • Indus World School of Business management, material management and delivery system. It will also assure that the supply is stable and available when needed. Plant design for maximizing efficiency: The design of plant is essential in terms of manufacturing efficiency and utility of resources. Adopt the work for continuous improvement: Commit a long- term continuous improvement throughout the organization. It will help the organization to remain competitive in the long run. Reduce unwanted wastes: Wastes that do not add value to the products itself should be eliminated. JIT helps significantly in reducing wastes. JIT also helps in eliminating.  Waste from overproduction  Waste of waiting time  Transportation waste  Inventory Waste  Waste of motion (energy)  Waste from defects JIT can help an organization to remain competitive by offering consumers higher quality of products than their competitors, which is very important in the survival of the market place.Challenges Though the objective of JIT is to reduce wastes at different levels of supply chain and to minimize the blockage of working capital throughout the supply chain, unfortunately majority of the manufacturing firms due to lack of integrity in whole supply chain exercise this concept to either to them only or to their first supplier. Due to lack of integrity in the supply chain the whole philosophy of JIT (i.e. to maximize customer’s value by reducing the redundant activities and redundant overheads) gets defeated. Manufacturers just pass the inventory overhead from their balance sheets to that of their suppliers (or sub-supplier/tier-2 suppliers). Which is not the JIT philosophy; it is more about taking whole supply chain as one system and making it efficient by reducing inventory blockages. One of the goals of JIT is to increase efficiency of supply chain but one can argue that it might reduce the efficiency of whole production system by increasing the risk of stock out of either inputs (raw material etc.) or output (i.e. finished goods). In both case it will lead to customer dissatisfaction. JIT may further multiply the bullwhip effect and can cause the distorted information flow through supply chain and thus may end up with shock out.Conclusion Most of the discussions in prior studies have cantered on either JIT or TQM but an increasing number of researchers have begun to explore the issues relating to a joint implementation of JIT and TQM. Many previous studies have encountered difficulty in precisely listing the practices comprising JIT and TQM because of the extensive overlap between these approaches. The overlapping practices of JIT and TQM are more than coincidental and they may be mutually supportive. Manufacturing practices can be divided into three groups: unique JIT practices, unique TQM practices, and common infrastructure practices and evaluated their impacts on cycle time and quality (i.e. JIT and TQM performance measures, respectively). The use of TQM practices improved JIT performance through process variance reduction and reduced rework time, Total Quality Management & Just In Time
  • Indus World School of Business thereby providing the levels of quality that allow production to proceed with minimum safety stock inventory while remaining on schedule. In turn, the use of JIT practices improved quality performance through problem exposure and improved process feedback. Not only that there are relationships and interactions between JIT and TQM practices and performance, and JIT and TQM function effectively in isolation, their combination yields synergies for further performance improvements. While the unique JIT and TQM practices added predictive power of the JIT and TQM related performance, the most significant factor turned out to be the common infrastructure practices (including information feedback, management support, plant environment, workforce management, and supplier relationship). The companies implementing both JIT and TQM jointly outperform those implementing only one of these, or none. All major elements of JIT are embedded in a more comprehensive TQM campaign because TQM has a much broader focus on improving the overall effectiveness of an organization. Management should not treat JIT and TQM as being exclusive business strategies. Rather, management should take an integrated view of joint JIT-TQM implementation.References Kristy O. Cua, Kathleen E. McKone, Roger G. Schroeder. Relationships between implementation of TQM, JIT, and TPM and manufacturing performance; Journal of Operations Management 19 (2001) 675–694. Steven W. Pool. The learning organization: motivating employees by integrating TQM philosophy in a supportive organizational culture; Leadership & Organization Development Journal 21/8 [2000] 373-378. Kumar V. JIT Based Quality Management: Concepts and Implications in Indian Context; International Journal of Engineering Science and Technology Vol.2(1), 2010, 40-50 Mullarkey S., Jackson P.R. and Parker S.K. Employee reactions to JIT manufacturing practices: a two-phase investigation; International Journal of Operations & Production Management, Vol. 15 No. 11, 1995, pp. 62- 79. © MCB University Press, 0144-3577 Crosby, P. Quality is Free: the art of making quality certain; McGraw Hill. (Book) Crosby, P. Quality without Tears: The Art of Hassle-Free Management. McGraw-Hill. (Book) Kanishka B. Quality Management; Oxford University Press. (Book) Total Quality Management & Just In Time