UNIT-V: Modern Production Tools

This unit focuses on contemporary methodologies and systems that have revolutionized
manufacturing and operations by emphasizing efficiency, waste reduction, quality, and
integrated information management.

1. Just-In-Time (JIT)

Just-In-Time (JIT) is a production strategy that aims to minimize inventory and associated costs
by producing or delivering products and components only when they are needed and in the exact
quantities needed. It's a pull system, driven by customer demand, rather than a push system based
on forecasts.

Core Philosophy: To eliminate all forms of waste (Muda) in the production process. Taiichi
Ohno of Toyota identified seven types of waste:

1. Overproduction: Producing more than needed or sooner than

needed.
2. Waiting: Idle time for workers or machines.
3. Transportation: Unnecessary movement of materials.
4. Over-processing: Doing more work than required by the customer.
5. Inventory: Excess raw materials, WIP, or finished goods.
6. Motion: Unnecessary movement of people.
7. Defects: Products or services that do not meet specifications.

Key Principles of JIT:

 Elimination of Waste (Muda): The overarching goal.

 Pull System: Production is triggered by actual demand, not forecasts.
 Small Lot Sizes: Producing in small batches reduces lead times,
inventory, and risk.
 Quick Setups (SMED - Single-Minute Exchange of Die): Reducing
the time it takes to change over equipment to enable smaller lot sizes
and greater flexibility.
 Standardized Work: Consistent and documented procedures to
ensure efficiency and quality.
 High Quality (Zero Defects): JIT exposes quality problems, forcing
their immediate resolution. Defects cannot be hidden by inventory.
 Strong Supplier Relationships: Collaborative and long-term
partnerships with reliable suppliers are crucial for timely and high-
quality deliveries.
 Multi-skilled Workforce: Employees capable of performing various
tasks provide flexibility.
  Preventive Maintenance: Regular maintenance to ensure machine
reliability and avoid breakdowns.
 Layout and Workflow: Streamlined layouts to minimize movement
and transport.

Benefits of JIT:

 Reduced Inventory Levels: Significant cost savings on storage,

insurance, obsolescence, and damage.
 Improved Quality: Defects are immediately apparent, leading to
quicker problem resolution.
 Reduced Lead Times: Faster response to customer demand.
 Increased Productivity: Elimination of waste leads to more efficient
resource utilization.
 Lower Production Costs: Due to reduced inventory, rework, and
waste.
 Greater Flexibility: Ability to respond quickly to changes in demand
or product mix.

Challenges of JIT:

 Dependence on Suppliers: Any disruption in the supply chain can

halt production.
 Lack of Buffer Inventory: No safety stock to absorb demand
fluctuations or production issues.
 Requires High Discipline: Strict adherence to processes and
schedules is essential.
 Initial Implementation Costs: May involve investments in training,
process redesign, and new equipment.
 Resistance to Change: Employees and management may be
resistant to new ways of working.

2. Total Quality Management (TQM)

Total Quality Management (TQM) is a management philosophy that emphasizes the

commitment of the entire organization to continuous improvement in all aspects of delivering
products and services that meet or exceed customer expectations. It integrates all quality-related
functions and processes throughout the organization.

Core Principles of TQM:

1. Customer Focus: The customer is the ultimate arbiter of quality.

Understanding and meeting customer needs is paramount.
2. Leadership Involvement: Top management must be actively
involved and committed to quality improvement.
 3. Employee Involvement/Empowerment: All employees are
responsible for quality and are empowered to identify and solve
problems.
4. Process Approach: Quality is a result of effective processes. Focus on
improving processes rather than just inspecting outcomes.
5. System Approach to Management: Viewing the organization as a
system of interconnected processes that contribute to overall quality.
6. Continuous Improvement (Kaizen): A never-ending pursuit of
improvement in all areas.
7. Factual Approach to Decision Making: Decisions based on data
and analysis, not intuition.
8. Mutually Beneficial Supplier Relationships: Working
collaboratively with suppliers to ensure the quality of incoming
materials.

Key Elements/Tools of TQM:

 Statistical Process Control (SPC): Using control charts and other

statistical methods to monitor and control processes.
 Quality Circles: Small groups of employees who identify and solve
work-related problems.
 Benchmarking: Comparing processes and performance against best-
in-class organizations.
 Pareto Analysis: Identifying the vital few causes that contribute to
the most problems.
 Fishbone (Ishikawa/Cause-and-Effect) Diagrams: Visualizing
potential causes of a problem.
 Flowcharts: Mapping processes to identify inefficiencies.
 Histograms: Visualizing the distribution of data.
 Scatter Diagrams: Showing the relationship between two variables.
 Check Sheets: Simple forms for collecting data.
 Training and Education: Equipping employees with the necessary
skills for quality improvement.
 Performance Measurement: Establishing metrics to track quality
progress.

Benefits of TQM:

 Enhanced customer satisfaction and loyalty.

 Improved product/service quality.
 Reduced costs due to less rework, scrap, and warranty claims.
 Increased productivity and efficiency.
 Better employee morale and involvement.
 Improved organizational reputation and competitiveness.

Challenges of TQM:
  Requires significant cultural change.
 Needs strong, visible leadership commitment.
 Can be time-consuming and require substantial resources.
 Difficulty in measuring tangible benefits initially.
 Resistance to change from employees.

3. Lean Manufacturing / ISO 9000 Series

Lean Manufacturing:

Lean Manufacturing is a systematic approach to identifying and eliminating waste (Muda)

through continuous improvement, flowing the product at the pull of the customer in pursuit of
perfection. It evolved from the Toyota Production System (TPS) and shares many principles with
JIT.

Core Principles of Lean:

1. Value: Identify what creates value from the customer's perspective.

2. Value Stream: Map all the steps in a process from raw materials to
the customer, identifying waste.
3. Flow: Make the value-creating steps flow without interruptions.
4. Pull: Let the customer pull value from the next upstream activity.
5. Perfection: Continuously improve in pursuit of zero waste and
continuous flow.

Key Tools and Techniques in Lean:

 Value Stream Mapping (VSM): A visual tool to map the current state
and future state of a process to identify waste.
 5S (Sort, Set in Order, Shine, Standardize, Sustain): Workplace
organization and cleanliness methodology to reduce waste and
improve safety.
 Kanban: A visual signaling system (pull system) to control production
and inventory.
 Poka-Yoke (Mistake-Proofing): Designing processes or products to
prevent errors from occurring.
 SMED (Single-Minute Exchange of Die): Rapid changeover
techniques for machines.
 Standard Work: Documented, repeatable processes.
 Kaizen: Continuous incremental improvement.
 Jidoka (Autonomation): Automation with a human touch; machines
that stop when a defect is detected.
 Heijunka (Leveling): Smoothing out the production schedule to
reduce fluctuations.

Benefits of Lean Manufacturing:

  Reduced lead times.
 Lower inventory levels.
 Improved quality.
 Increased productivity.
 Reduced operating costs.
 Greater flexibility and responsiveness.
 Enhanced employee engagement.

ISO 9000 Series:

The ISO 9000 family of standards is a set of international standards for quality management
systems (QMS) published by the International Organization for Standardization (ISO). It
provides a framework for organizations to ensure that they consistently provide products and
services that meet customer and regulatory requirements.

Key Standards in the ISO 9000 Series:

 ISO 9000: Quality Management Systems – Fundamentals and

Vocabulary: Defines the basic concepts and terms used in the ISO
9000 family.
 ISO 9001: Quality Management Systems – Requirements: This is
the most important standard in the series. It specifies the requirements
for a QMS that organizations can use to ensure their ability to
consistently meet customer and regulatory requirements.
Organizations can get certified against ISO 9001.
 ISO 9004: Managing for the Sustained Success of an
Organization – A Quality Management Approach: Provides
guidelines for organizations to achieve sustained success through a
QMS, going beyond the requirements of ISO 9001.

Core Principles of ISO 9001 (as updated to ISO 9001:2015):

1. Customer Focus: Meeting and exceeding customer expectations.

2. Leadership: Strong leadership to establish unity of purpose and
direction.
3. Engagement of People: Competent, empowered, and engaged
people are essential.
4. Process Approach: Managing activities as interconnected processes
to achieve consistent results.
5. Improvement: Continuous improvement is a permanent objective.
6. Evidence-based Decision Making: Decisions based on data and
analysis.
7. Relationship Management: Managing relationships with interested
parties, including suppliers.

Benefits of ISO 9001 Certification:

  Improved Customer Satisfaction: Due to consistent quality.
 Enhanced Reputation: Demonstrates a commitment to quality.
 Increased Efficiency and Productivity: Through documented
processes and reduced errors.
 Better Internal Communication: Clearer roles and responsibilities.
 Access to New Markets: Many customers and industries require ISO
9001 certification.
 Reduced Costs: Fewer errors, rework, and waste.
 Improved Employee Morale: Clear processes and a focus on quality.

4. Basic Concepts of Kaizen, Poka-Yoke, and KANBAN

These are foundational tools and philosophies within Lean and TQM.

Kaizen

 Meaning: Japanese for "change for the better" or "continuous

improvement."
 Concept: A philosophy that encourages small, incremental
improvements to processes and systems on an ongoing basis,
involving everyone from top management to frontline workers. It's
about constant evolution, not revolutionary breakthroughs.
 Key Aspects:
o Small Steps: Focus on small, manageable changes that can be
implemented quickly.
o Employee Involvement: Encourages suggestions and
participation from all employees.
o Gemba (Go to the actual place): Problem-solving happens
where the work is done.
o Elimination of Waste: Central to the Kaizen philosophy.
o Standardization: Once an improvement is made, the new
process is standardized.
 Benefits: Fosters a culture of continuous learning and problem-
solving, improves efficiency, reduces waste, and enhances employee
morale.
 Kaizen Event (Kaizen Blitz): A focused, short-term (e.g., 3-5 days)
intense improvement activity involving a cross-functional team to
rapidly improve a specific process.

Poka-Yoke

 Meaning: Japanese for "mistake-proofing" or "inadvertent error

prevention."
  Concept: Devices or methods designed to prevent errors from
occurring or to make errors immediately obvious, thereby eliminating
defects.
 Inventor: Shigeo Shingo (a key figure in TPS).
 Types of Poka-Yoke:
o Prevention: Designing a process or product so that an error
simply cannot be made (e.g., asymmetrical parts that can only
be assembled one way).
o Detection: Allowing an error to occur but immediately signaling
it so it can be corrected before it leads to a defect (e.g., a sensor
that detects a missing part).
 Examples:
o A washing machine that won't start if the lid is open.
o USB connectors that only fit one way.
o Error messages on forms that detect incorrect data entry.
o Color-coded cables that only connect to matching ports.
 Benefits: Eliminates defects, reduces rework, improves safety, and
simplifies operations.

KANBAN

 Meaning: Japanese for "visual signal" or "signboard."

 Concept: A scheduling system for Lean and JIT production that
controls the flow of materials and production based on actual demand
(a pull system). It uses visual signals (cards, containers, designated
spaces) to trigger the replenishment of materials or the start of
production.
 Inventor: Toyota (developed by Taiichi Ohno).
 How it Works (Simplified):
1. When a downstream process consumes materials from an
upstream process, a Kanban card (or other signal) is sent back to
the upstream process.
2. This card authorizes the upstream process to produce or supply a
specific quantity of material.
3. Production or delivery only occurs when a signal is received,
preventing overproduction.
 Types of Kanban Cards:

o Production Kanban (P-Kanban): Authorizes the production of

a certain quantity of items.
o Withdrawal Kanban (W-Kanban): Authorizes the movement
of a certain quantity of items from one workstation to another.

 Benefits: Reduces WIP inventory, prevents overproduction, highlights

bottlenecks, improves flow, and facilitates rapid detection of problems.
  Key Rule: Never produce or move anything unless authorized by a
Kanban signal.

5. ERP: Modules – Implementation

Enterprise Resource Planning (ERP)

ERP is a comprehensive software system that integrates all aspects of an organization's

operations (e.g., planning, manufacturing, sales, marketing, finance, human resources, supply
chain, customer service) into a single, unified database and system. Its primary goal is to
improve efficiency, decision-making, and communication across the enterprise.

Core Concept: To provide a holistic view of the business by centralizing data and automating
processes, eliminating redundant data entry and improving information flow.

Key Characteristics of ERP:

 Integration: All business functions are integrated into a single

system.
 Centralized Database: A common database stores all organizational
data, ensuring consistency and accuracy.
 Real-time Information: Provides up-to-date information for better
decision-making.
 Modularity: Composed of various functional modules that can be
implemented together or separately.
 Standardized Processes: Encourages the adoption of best practices
through its embedded workflows.

ERP Modules:

While specific modules may vary slightly by vendor and industry, common ERP modules
include:

1. Financial Management:
o General Ledger (GL)
o Accounts Payable (AP)
o Accounts Receivable (AR)
o Fixed Asset Management
o Budgeting and Forecasting
o Cost Accounting
o Financial Reporting

2. Human Capital Management (HCM) / Human Resources (HR):

o Payroll Management
o Personnel Administration
 o Recruitment and Onboarding
o Time and Attendance
o Performance Management
o Training and Development

3. Manufacturing / Production Planning:

o Bill of Materials (BOM)
o Material Requirements Planning (MRP)
o Production Scheduling
o Shop Floor Control
o Capacity Planning
o Quality Management

4. Supply Chain Management (SCM):

o Procurement / Purchasing
o Inventory Management
o Warehouse Management
o Order Management
o Logistics and Distribution
o Supplier Relationship Management (SRM)

5. Sales and Marketing / Customer Relationship Management (CRM):

o Sales Order Management
o Lead Management
o Opportunity Management
o Quoting and Pricing
o Customer Service and Support
o Marketing Campaigns

6. Project Management:
o Project Planning and Scheduling
o Resource Allocation
o Cost Tracking
o Time Tracking
o Billing

7. Analytics and Reporting:

o Business Intelligence (BI) tools
o Customizable Dashboards
o Reporting features for various business metrics

ERP Implementation:

Implementing an ERP system is a complex, multi-stage process that requires careful planning,
significant resources, and strong change management.
Typical Phases of ERP Implementation:

1. Planning and Project Preparation:

o Define Scope and Objectives: What processes will be
covered? What are the desired outcomes?
o Form Project Team: Include representatives from all affected
departments, IT, and external consultants.
o Select ERP Vendor and Software: Based on organizational
needs, budget, and industry fit.
o Develop Project Plan: Timelines, resources, budget,
milestones.
o Set up Governance Structure: Roles, responsibilities,
decision-making processes.

2. Business Process Analysis and Design (Blueprint Phase):

o As-Is Analysis: Document current business processes.
o To-Be Design: Map future processes based on ERP capabilities
and desired improvements.
o Gap Analysis: Identify differences between "As-Is" and "To-Be"
and determine customization needs (minimize customization
where possible).
o Configuration: Configure the ERP software to align with the "To-
Be" processes.

3. System Development and Customization:

o Configuration of Modules: Setting up parameters, master
data, and workflows.
o Customization (if necessary): Developing custom reports,
interfaces, or functionalities.
o Data Migration: Extracting, cleansing, transforming, and
loading old data into the new ERP system. This is a critical and
often challenging step.
o Integration: Connecting the ERP system with other existing
systems (if not fully replaced).

4. Testing:
o Unit Testing: Testing individual modules and functionalities.
o Integration Testing: Testing how different modules interact.
o User Acceptance Testing (UAT): End-users test the system to
ensure it meets their business requirements.
o Performance Testing: Assessing system speed and scalability.

5. Training:
o Training for end-users on how to use the new system and its
functionalities.
o Training for IT staff on system administration and support.
 6. Go-Live (Deployment):
o Switching from the old system to the new ERP system.
o Cutover Planning: Detailed plan for the transition.
o Phased Rollout: Deploying modules or locations gradually.
o Big Bang: Deploying all modules at once.

7. Post-Implementation Support and Optimization:

o Providing ongoing user support and troubleshooting.
o Monitoring system performance.
o Identifying areas for further optimization and improvement.
o Regular updates and maintenance.

Challenges in ERP Implementation:

 High Costs: Software licenses, customization, consulting, training.

 Long Implementation Times: Can take months to years.
 Resistance to Change: From employees accustomed to old ways.
 Data Migration Issues: Data quality and consistency problems.
 Scope Creep: Uncontrolled expansion of project scope.
 Lack of Top Management Commitment: Insufficient support and
resources.
 Inadequate Training: Users not properly prepared.
 Customization Pitfalls: Too much customization can lead to
complexity and maintenance issues.