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Unformatted text preview: Operational Efficiency Just-in-Time (J I T) Inventory Management Systems • Characteristics of JIT: • I t’s a demand-pull system rather than push system • Minimization inventory level • Less money invested on idle assets, reduction of storage space, lower inventory taxes and storage risks • Focus on quality control (low inventory=>no room for defective parts) • Elimination of the need for certain internal control (because of low in inventory) • A very close relations with the suppliers, the use of (EDI) electronic data interchange • Use of lean production where each worker in each cell know how to operate all the machine in that cell Kanban (tickets, cards) Is an integrated part of JIT, is one means through which JIT is achieved, Kanban is not an inventory system, rather it’s a scheduling system. Major principles of Kanban: • Kanban works from upstream to downstream in the production process (i.e., starting with the customer order). • The upstream processes produce only what has been withdrawn. • Only products that are 100 percent defect-free continue on through the production line. • The number of Kanban should be decreased over time. =>continuous improvement. Master Production Schedule MPS A Master Production Schedule is the master of all schedules. I t is a plan for future production of end items. I t sets the quantity of each end item to be completed in timely framework planning horizon. Materials Requirements Planning M RP I t’s a system enables company to efficiently fulfill the requirements of the MPS by coordinating both the manufactured of components parts for finished goods and the arrival of the raw materials necessary to create the intermediate component.-Materials requirements planning is an approach that uses computer software to help manage a manufacturing process. I t is a system for ordering and scheduling of dependent demand inventories.-Dependent demand is demand for items that are components, or subassemblies, used in the production of a finished good.-M RP is a push inventory system => goods are manufactured upon forecasting demand - M RP can be used to reduce cash needed by the organization by prescheduled expenses, which in turn improves profitability and ROI=> no more large cash amount just waiting before product can be manufactured.-The three overriding goals of MRP are the arrival of the right part in the right quantity at the right time.-Benefits of MRP are reduced idle time, lower setup costs, lower inventory carrying costs, and increased flexibility in responding to market changes. The MRP consult the BOM the bill of materials which is a record of how many subassemblies parts go into product. Materials Resource planning (MRP I I) MRP is a component of MRPII, it’s a closed-loop manufacturing system that integrates all facets of a manufacturing business including production, sales, inventories, schedules, and cash flows....
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This note was uploaded on 08/16/2011 for the course MGMT 301 taught by Professor Hisham during the Spring '11 term at McMaster University.
- Spring '11