The impact of capacity planning when trying to implement JIT

Discuss the impact of capacity planning when trying to implement JIT Aylesbury pressing has been in business for over a century so their way of working and their pricniples followed with regard to manufacturing has always been creating buffer stock at every stage at their production area and their assembly only starts when all various products have accumalted and at the moment normal manufacturing lead times is 6-8 weeks. Implementing JIT is going to be a problem because at the moment people have set job functions and the JIT procedures and disciplines wants people to multi task and states team measurements will be done instead of individual performance, JIT needs a demand for work but at the moment AP is just producing and because of sales increasing they need a proper system in place or the business will not be able to satisfy customer demands. Capacity is calculated: (number of machines or workers) × (number of shifts) × (utilization) × (efficiency) and works in harmony with JIT, managing lead times and eliminating waste.

Implementing a JIT system requires management to consider issues of worker stress, cooperation and trust among workers and management, and reward systems and labor classifications. In a JIT system, workers must meet specified cycle times and workers feel pushed and stressed, causing productivity losses or quality reductions and due to AP staff mindset been on doing a single activity per person it is going to take a lot of time for proper implementation. Workers at AP might feel that they have lost some autonomy because of the close linkages in materials flows between stations with little or no safety stocks due to elimination of waste through capacity planning.

The fluctuation of demand creates problems regarding the procurement of resources to meet the customer demand and due to AP merely keeping up with demand JIT is going to be difficult to implement within a short period as capacity decisions are strategic in nature and is usually expressed as volume of output per period of time. AP needs to be concerned about the capacity for the following reasons:

•Sufficient capacity is required to meet the customers demand in time.

•Capacity affects the cost efficiency of operations.

•Capacity affects the scheduling system.

•Capacity creation requires an investment. On startup changing the mindset of older staff is going to be a problem but work in smaller cells in the production area and move forward from there. Suppliers will also be an issue as once JIT is implemented as their routine is going to have to work around the needs of the company and delivery times will have to change to accommodate the company’s needs. AP did not give Stuart enough time to implement the new structure to accommodate company’s rise in business as JIT takes time to run smoothly and because new staff will be needed when business rises training of staff will be a problem. Capacity planning will work once it has been running for a while and all workers have been trained and Management structure changes slightly as reporting structure of the firm is not right and JIT will require the structure to change to ensure smooth flow of materials.

Contrast the key characteristcs of MRP and JIT Materials resources planning and just in time processing are two methods of controlling production and inventory levels for manufacturers. MRP focuses on production of finished goods based on forecast requirements, while JIT focuses on production as a response to actual orders. Both MRP and JIT rely heavily on computerized information processing. MRP Advantages:

•The planning process summarizes all requirements and allows coordination of materials ordering. Hence reduces ordering of many small lots of the same item.

•Materials resources planning allow maintaining a reasonable safety stock level, and minimizing or eliminating unnecessary inventories. •Materials resources planning are capable of identifying process problems and potential supply chain disruptions.

•Materials resources planning are suitable for batch and intermittent production or assembly processes.

•Provides the time period as to when an order is needed; it allows calculating requirements of the component parts as far into future as the master schedule permits.

Disadvantages:

•Materials resources planning is computer intensive and making a change is difficult once the system is in operation,

•Ordering and transportation costs may rise as inventory levels are reduced and smaller quantity of product is scheduled to arrive Just in time.

•MRP is not sensitive to short term fluctuations in demand and its applications are quite complex and do not work exactly as intended JIT

Advantages:

•JIT concept relies heavily on "high quality" product and components manufactured, and a capable and precise logistics system to manage materials and physical distribution. It proposes that materials be available when it is needed-not earlier or later.

•Flow Process; Flexible manufacturing. ( quick and flexible response to customer demands);Lowering operating costs; Increasing operating efficiency; improving product quality; Minimum inventory; Zero failure.

•Manage lead-time and eliminate waste with an emphasis on short, consistent lead-time. Inventory reduction is a result of JIT. Reducing inventory will direct managers to identify problem areas and as a result to improve operations processes.

Disadvantages

•Supplier that does not deliver goods to the company exactly on time and in the correct amounts could seriously impact the production process.

•A natural disaster could interfere with the flow of goods to the company.

•No links on computer systems of the company and its suppliers, so that they can coordinate the delivery of parts and materials.

•A company may not be able to immediately meet the requirements of a massive and unexpected order, since it has few or no stocks of finished goods. Material Requirements Planning is a time phased priority-planning technique that calculates material requirements and schedules supply to meet demand across all products and parts in one or more plants. MRP embraces the concept of dependent demand. Advantage of MRP is its ability to successfully organize the production of each component so parts are ready when needed and the production process doesn't stall for lack of finished components. The three objectives of a Material Requirements Planning system are to maintain the least inventory required to adequately meet the job requirements; to guarantee the finished products can be produced and delivered in a timely manner; and to efficiently plan purchasing, manufacturing, and delivery to flow without interruption or incident. MRP systems use four pieces of information to determine what material should be ordered and when:

•The master production schedule, which describes when each product is scheduled to be manufactured.

•Bill of materials, which lists exactly the parts or materials required to make each product.

•Production cycle times and material needs at each stage of the production cycle time.

•Supplier lead times.

The master schedule and bill of materials indicate what materials should be ordered; the master schedule, production cycle times and supplier lead times then jointly determine when orders should be placed. JIT is a manufacturing process that responds to actual orders and company needs. It relies on the timely delivery of exactly the right raw materials in the right place and the right quality to allow for production as orders are received. An advantage of JIT is its reduction of the amount of raw material and finished goods on hand so inventory is minimal, which can reduce carrying costs and the likelihood of spoiled or damaged goods. It focuses on accurate production and leaves little room for production errors.

A disadvantage of JIT is that if suppliers fail to deliver raw material as scheduled, a halt in production can occur because of the limited inventory in stock. Different goals of MRP and JIT mean that each system works better under certain conditions. MRP is well-suited to a production line that operates on a batch or special order basis. The system's ability to constantly adjust for changing requirements makes it react well to variable orders like. The JIT system works well in an environment of repetitive orders of similar products. Suppliers can more easily respond to prompt delivery schedules for routine orders of similar materials. The emphasis in both MRP and JIT is on the reduction of waste in the production process.

Both systems achieve improvements in inventory levels and are the intent of MRP and JIT systems to prevent lost production time, although MRP is more responsive to fluctuations in production as it is a change-based system. Production under the JIT system may be hampered by lack of capacity if unexpected orders are received. Aylesbury pressing in my opinion needs both these concepts to work in harmony as they do not have JIT principles but going over from capacity planning to JIT will take time and effort and co-operation of employees.