INVENTORY REDUCTION IN A VALVE MANUFACTURING INDUSTRY: A JIT MANUFACTURING APPROACH

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1 INVENTORY REDUCTION IN A VALVE MANUFACTURING INDUSTRY: A JIT MANUFACTURING APPROACH Rajenthirakumar D a*, Brajesh kumar kanchan b a, b Department of Mechanical engineering, PSG College of Technology, Coimbatore , Tamil Nadu, India A B S T R A C T In the competitive market scenario, the company is facing difficulties in making profit. The lean concepts are like solution tools for them. It mainly focuses on eliminating wastes from the process adopted in the industries and creating value product to the customer with less capital investment. The just in time is an ideology originated in Toyota as like other lean concepts but it mainly focuses on providing a pathway for the industries to reach a state where inventories requirement on the shop floor will be fulfilled by the suppliers at real time. The case study conducted in Indian valve industry where the raw material inventory for the company had a large pie of investment. The major focus of paper is to identify inventory present in factory process and replace it with Just in Time (JIT) Approach. For identify the inventories, understanding of procurement cycle is important. So, The Pathway starts with identification of key customer along with key product. The key product is thoroughly analyzed with ABC Analysis (value engineering concept) to determine the targeted parts. The parts supplier are analyzed with their delivery date and quality produced by them in current process. The Ranking of suppliers are generated carried away by different supplier development strategy than Continuous Inventory Removal (CIR) Plan has formulated based on Continuous sampling plan used in sampling inspection and data s are analyzed and validated for this method. As the conclusion, the JIT implementation brings several favorable factors like reduction in inventory level, less investment required for running business. K E Y W O R D S Just in Time; Continuous Inventory Removal. A R T I C L E I N F O Received 08 March 2017 Accepted 18 June 2017 Available online 28 June 2017 * Corresponding author: rajentkumar@gmail.com,tel.:

2 1. Introduction The JIT concept was discovered by Toyota industries in 1970s and after having a successful record, it was followed by western industries. Just in Time manufacturing is an ideology mainly focuses to reduce inventories involved in the manufacturing by providing right quantity of materials at right time in right condition [1]. Hiroyuki hirano [2] defined JIT as JIT, or Just In-Time, refers to the timing of production flow; goods are delivered to the manufacturing lines just in time to be used, just in the immediately needed quantities, and just to the production processes that need them. By the evolvement of lean manufacturing in 1990s, the JIT concept was one of core objective set for it.the JIT implementations have several advantages but still the implementation of JIT is very much limited due to traditional mindset of doing business with having a bulk of inventories [3].Bin Adnan [4] found that with help of kanban, JIT production system improved in terms of reduction in inventory, lead time, less floor area for finished goods more than 20% on average. Dr. Sanjay Kumar [5] also found that JIT implementation reduces 275 minutes of operation time of double window sight flow indicator and more customer satisfaction. Mitsutoshi Kojima [6] performed evaluation of supply chain in JIT environment and concluded that with help of kanban and markov process, the uncertainty among multi stage production with stochastic demand and deterministic processing time could be handled. Akbar [7] found that implementation of JIT reduces work in progress to 82%, space to 40%, shipments of company increases to 20%. Halim[8] founded gravity flow rack method is useful in improving material handling system for JIT and productivity per man hour of line increased by 9.75%. Vikas Kumar[9] formulated approach to tackle the barriers for implementation of JIT. Linda [10] explored relationship among supplier development and product capacities of firm. She also provided some general strategy to develop suppliers in terms of productivity. 2. Objective and Methodology The objective of the paper is to provide a unique pathway through which the industries could attain JIT concept. The flow diagram is drawn to understand connection among the steps and have focus on particular area of research. The inventories at factory are caused due to inefficiency among any state of production process. For that we need to know the Key customer, Key product ordered, and costliest part among product, their suppliers and their efficiency. The process is shown in Figure Defining key customer The JIT implementation starts with identification of key customer since as a manufacturer we need to satisfy him mostly. The datas are taken from finance department and key customer is identified with maximum profit % and least COQ%. The datas are tabulated in Table 1. From the Table, it is inferred that A is key customer Defining key product After identification of key customer, the focus will be given to finding key order from him. The Datas are again gathered from finance department and tabulated in Table 2. From the table, it can be concluded that ¾ is key product of key customer. 30

3 Table 1 Identification of Key customer CUSTOMERS NET SALES (IN LAKHS) COST OF QUALITY(BASED ON COMPLEXITY OF OPERATION) AVERAGE PROFIT /TON(DATA OBSERVED FROM PLANNING DEPARTMENT TABLE) % PROFIT % OF COQ A , B , C , D , E , F , G , H , TOTAL ,170 Fig. 1 Methodology adopted Table 2 Identification of Key product Defining Key customer Defining Key order from customer :3/4" valve(vtcs) Process flow diagram for procurement Data Collection For Bill Of Material:3/4" valve(vtcs) ABC Analysis for the component of ¾ VTCS Valve Current suppliers performance and reliability Ranking of suppliers Supplier development strategies Preliminary testing Comparison of results and tabulation Continuous inventory removal plan Inventory data comparison Cost analysis Verification and validation of results ORDER NO FIGURE NO TYPE OF VALVE VALVE SIZE NUMBER OF QUANTITIES ORDER DATE DELIVER DATE R W B-02NB-WOO2 VELAN TRAP CONNECTOR STATION 3/4" TH AUGUST 14TH DEC R W B-02NB-WOO10 SMALL FORGED VALVES 1/2" TH AUGUST 06TH NOV R W B-02NB-WOO17 BONNETLESS VALVES 4" 46 4TH AUGUST 17TH DEC R W B-02NB-WO178 CAST STEEL VALVES 12" 4 24TH AUGUST 18TH JAN R W B-02NB-WO462 PRESSURE SEAL VALVES 7" 6 29TH AUGUST 4TH JAN R W B-02NB-WO468 BELLOW SEAL VALVES 1" 54 10TH AUGUST 16TH DEC 2.3. ABC Analysis of Bill of material (3/4 valve) The Next step is to collect Bill of material data for ¾ valve and do ABC Analysis to determine the critical cost constituent of that valve. The Datas are collected from engineering department and tabulated in Table 3. From the table, it is understood that we need to target A subcategory of ABC Analysis, particularly Body part in the valve as it is consuming maximum cost among others. 31

Table 3 ABC analysis 2.4. Body suppliers of ¾ valve The next step is to determine the suppliers of body part as those are the suppliers among which we need to target for making best key supplier.

4 Table 3 ABC analysis 2.4. Body suppliers of ¾ valve The next step is to determine the suppliers of body part as those are the suppliers among which we need to target for making best key supplier. The datas are collected from purchase department and tabulated in Table 4. Table 4 Identification of Key supplier From the table, it can be inferred that currently B is key supplier for body, if delivery dates is not a problem means D is having finest quality product. 3. Continuous inventory removal plan (CIR) Further, the Suppliers of body parts will be developed by the strategy discussed by Linda,RK Mishra and Rajendra Chavhan followed by testing of efficiency of supply chain and results will be compared thoroughly and CIR Plan will be checked for having inventory data comparison. A model CIR Plan (Figure 2) is given that will be used for JIT implementation in further stages. 32

Fig. 2 Continuous inventory removal plan 4. References 1. SandeepPhogat, Introduction to JIT: A REVIEW, IJLRST ISSN (Online):2278-5299 Volume 2, Issue 6: Page No.97-101, November-December 2013. 2. Hiroyuki hirano, JIT implementation manual, 2nd edition, CRC Press 3.

5 Fig. 2 Continuous inventory removal plan 4. References 1. SandeepPhogat, Introduction to JIT: A REVIEW, IJLRST ISSN (Online): Volume 2, Issue 6: Page No , November-December Hiroyuki hirano, JIT implementation manual, 2nd edition, CRC Press 3. BhupeshLohar, JIT practices in Indian industries: a survey, IJCCR India 4. Ahmad Naufal Bin Adnan, Implementation of Just in Time Production through Kanban System,IISTE, Vol.3, No.6, Dr. Sultan Singh,JIT System: Concepts, Benefits and Motivation in Indian Industries,IJMBS Vol. 1, Issue 1, March Dr. Sanjay Kumar, Manufacturing Excellence through JIT Approach, IJAIEM, Vol 2, Issue 7 7. Mitsutoshi Kojima, Performance evaluation of SCM in JIT environment, Int. J. Production Economics 115 (2008) Akbar Javadian Kootanaee, Just-in-Time Manufacturing System: From Introduction to Implement, International Journal of Economics, Business and Finance Vol. 1, No. 2, March 2013, PP: NurulHayati Abdul Halim, Gravity Flow Rack s Material Handling System for Just-In-Time (JIT) Production, IRIS 2012, Procedia Engineering 41 ( 2012 ) Vikas kumar, JIT Based Quality Management: Concepts and Implications in Indian Context, International Journal of Engineering Science and Technology, Vol.2(1), 2010, Linda Hendry,supplier, Development and literature review and key future research areas, International Journal of Engineering and Technology Innovation, vol. 2, no. 4, 2012, pp

ABSTRACT I. INTRODUCTION LITERATURE REVIEW

ABSTRACT I. INTRODUCTION LITERATURE REVIEW 2017 IJSRST Volume 3 Issue 3 Print ISSN: 2395-6011 Online ISSN: 2395-602X Themed Section: Science Technology Lean Manufacturing Implementation Technique A Review Chetan Patel*, Satayu Travadi, Vikas Panchal