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MANAGEMENT INVENTORY SYSTEM (JUST IN TIME (JIT)) - page49 - Coggle Diagram
MANAGEMENT INVENTORY SYSTEM (JUST IN TIME (JIT))
- page49
Practiced pull system
production is based on actual demand
Purpose: eliminate waste
7 waste
inventory
over-production
waiting time
transportation
motion
human resources
manufacturing system
product defect
processing time
can be achieved through
internal elements
manufacturing system
human resources
external elements
suppliers
other organizations with close relationship with manufacturer
concept than been used in JIT
5S
Seiri (clear)
seiton (configure)
seisio (clean and check)
seiketsu (conformity)
sitsuke (custom and practice)
Definition
a philosophy of manufacturing excellence based on pursuit of the planned elimination of all waste and consistent improvement of productivity,
It encompass the successful execution of all manufacturing activities required to produce a final product from design engineering to delivery and including all stages from conversion of raw material onward.
making "only what is needed, when it is needed, and in quantity needed"
emphasis on continuous improvement and zero defects through: (which require employee involvement and commitment)
product design
process design
supplier quality
3 primary goals
elimination
of any production process or operation that
does not add value
to the product/service
continuous improvement
in production/performance
efficiency
reduction in total cost
of production/performance while i
ncreasing quality
Other goals
Sustain its profit margin (Petronas Dagangan) - due to uncertain crudes oil price (minyak mentah)
"we order our supplies at the right time and moments to ensure our stocks are not too high if there's a plunge (kejatuhan) in oil prices."
Why need to implement JIT
intensity of competition
efficiency
flexibility
delivery performance
quality
effectiveness
customer responsiveness
improve the company performance
Factors lead to successful JIT implementation
training and development for managers and production workers
technical
behaviour
high commitment from top management and employees
employees involvement
Elements in JIT philosophy
quality
employee involvement
production flow
Interrelated elements
uniform factory loads
set up time production
machine cells
pull system
JIT Purchasing
Modifications and changes required before get the benefits of JIT
Change in production process
Quick and economic setups
Flexible employees
Change in maintenance of equipment - preventive equipment
Supplier long-term relationship
Quality control and improvement
Purchasing consideration
Vendor certification and reduction of suppliers' number
product and process simplifications
Plant layout
Steps in JIT production
Receive customer orders
2) Schedule production
3) receive materials just in time for production
4) Complete part just in time for assembly into products
5) Complete products just in time to ship customers
Benefits
Reduced inventory costs
Reduce costs
Waste reduction
Higher quality product
Increased throughput
Freed-up fund
Greater customer satisfaction
Stay ahead of competitors
Disadvantages
Expose the company to certain risks
Some resistance from suppliers to give cooperation to the JIT company
Require high investment
Employees' resistance and low commitment from management
Expose un satisfaction to the workers and employees
Acc. systems changes in responses to JIT
Backflush Costing system
Purchased of materials
and
work in process (WIP)
combined in one account:
Raw materials and in process inventory
used only for tracking the cost of raw materials
In JIT environment, WIP & finished good are minimal and goods are sold immediately after they are completed.
Direct labor
and
overhead
combined into one account:
Conversion account
(temporary account & will be closed after transaction are complete)
Use trigger point
:
situations
The purchase of raw materials (trigger 1) & the completion of goods (trigger 2)
The purchase of raw materials (trigger 1) & the sales of goods (trigger 2)
The completion of goods (only trigger point)
The sales of goods (only trigger point)
The transaction is recorded only at
trigger point
The cost of manufacturing are
"flushed out'
of system after the goods are completed.
No recording for transaction when materials issued (dikeluarkan) in production
When the
goods are complete
, the application of overhead will be recorded as credit into
Conversion Cost Account