Manufacturing Resource Planning


MRPII - JIT Systems

1.1 MRP II Systems (Manufacturing Resource Planning)

MRP II are integrated computer systems which connect a MRP I system with other functional units and synchronize all the activities (not only the production) of the company. The MRP II system coordinates the sales, purchases, production, financial and technical studies, adopting a focal production plan and using a unified database for designing and updating all systems.

The MRP II allows the company to test hypothetical scenarios using the simulation. The administration may provide the monetary value of shipments, product costs, overhead allocation, stocks, order backlog and profits. The reports of the system can help the sections of production, markets, marketing, financial and technical studies for the implementation and monitoring of the general business plan and identifying sales targets, production capabilities and the limits to cash flow.

Also MRP II system has the following features:[i]

1. Feedback

MRP II includes feedback from the production line on how the work has progressed, to all levels of the schedule so that the next run of the MRP can be updated.

2. Resource Scheduling

Also there is a scheduling capability in the system that concentrates on the resources. The advantages of this element are that detailed plans can be put to the shop floor and can be reported on by operation, which offers much tighter control over the plant. Furthermore loading by resource means that capacity is taken into account.

3. Batching Rules

Batching rules can be incorporated; indeed they have to be if resource scheduling is to take place. Most software packages offer a variety of batching rules. Three of the more important are 'Lot for Lot', 'EBQ' and 'Part Period Cover'.

4. Software extension programs

MRPII includes numerous software programs. These software programs aid in the functioning of the business. They have been manufactured with the intent to benefit the company in all ways. There are a lot of calculations involved with regards to these softwares.

The MRP II systems are best suited to mass production companies with a fairly predictable logistics and demand.

1.2 JIT Systems (Just In Time)

"JIT systems originally referred to the production of goods to meet customer demand exactly, in time, quality and quantity, whether the "customer" is the final purchaser of the product or another process further along the production line.

It has now come to mean producing with minimum waste. "Waste" is taken in its most general sense and includes time and resources as well as materials.

Elements of JIT include: Continuous improvement.

  • Attacking fundamental problems - anything that does not add value to the product.
  • Devising systems to identify problems.
  • Striving for simplicity - simpler systems may be easier to understand, easier to manage and less likely to go wrong.
  • A product oriented layout - produces less time spent moving of materials and parts.
  • Quality control at source - each worker is responsible for the quality of their own output.
  • Poka-yoke - "foolproof" tools, methods, jigs etc. prevent mistakes
  • Preventative maintenance, Total productive maintenance - ensuring machinery and equipment functions perfectly when it is required, and continually improving it.

Eliminating waste. There are seven types of waste:

  • waste from overproduction.
  • waste of waiting time.
  • transportation waste.
  • processing waste.
  • inventory waste.
  • waste of motion.
  • waste from product defects.

Good housekeeping - workplace cleanliness and organization.

Set-up time reduction - increases flexibility and allows smaller batches. Ideal batch size is one item. Multi-process handling - a multi-skilled workforce has greater productivity, flexibility and job satisfaction.

Levelled / mixed production - to smooth the flow of products through the factory.

Kanbans - simple tools to "pull" products and components through the process.

Jidoka (Autonomation) - providing machines with the autonomous capability to use judgment, so workers can do more useful things than standing watching them work.

Andon (trouble lights) - to signal problems to initiate corrective action." [ii]

Chapter 2: JIT Implementation

2.1 JIT Introduction in a company

The last thirty years a tremendous progress has been made on the methods and techniques related to the application of the JIT philosophy. A number of implementation of JIT systems have been taken place, but most of them deal with large-scale industries. However small and medium sized industries play an important role in a national economy. For this reason, it is important to help these companies to improve their competitiveness and as a result to improve the national economy. Although JIT systems have not received much consideration from medium sized companies who fear that JIT implementation requires investments of capital in labour, materials and equipment. However, in most cases JIT needs change in the management of various production operations, but not necessarily investment in automation, new equipment and employees.

The major advantages of implementation JIT system to this medium sized company are smaller inventories, better quality and shorter lead times. Also JIT implementation will improve both future competitiveness and current cash flow.

There are five phases involved in the implementation of JIT into this fridge manufacturing company: [iii] [iv]

1. "Cleaning up" the operations

Before the company starts the implementation of the JIT program, it is important its operations must be put in order. The importance of that is the ability to evaluate the operations and to know which the operations efficiency in the company is. Also the management must enforce systems and processes that will help to work in harmony with the current MRP II system.

2. Effecting a company - wide culture change

The changes of JIT implementation affect everyone in the company. For this reason it is necessary two levels of company culture changes take place. One is at the corporate operations level that means a complete reversal of management thinking to arrive at the desired final end. The other change is in employee level. A "partnership type" relationship must be between employers and employees in order to JIT implementation to be successful. Also employees cooperation is necessary to eliminate sitting and waiting time of the product for the next process. Additionally workers should be trained to operate several machines to perform maintenance tasks and to perform quality inspections. Furthermore a preventive maintenance must be made using machine and workers idle time maintain equipment and prevent breakdowns.

3. Preparing logistics for JIT

The management of the industry must find suppliers and subcontractors with quality products and require from them quality assurance. Also suppliers must have a will to cooperate with the companies JIT system. The company can also send engineers to help suppliers to solve their problems and as a result to minimize the defective items that leads to work line slowdowns or stoppages. Additionally a long term and ideal relationship must be established between the supplier and the company.

4. Implementing the program

The implementation of JIT program should be done in stages, in order to prevent resistance from the workers. By easing into JIT one step at a time, both management and employees will become comfortable with the system. A slowly but steadily proceeding in the system will help nurture competence in the new procedures and confidence in the new system. Above all else, activities related with the JIT program become routine to everyone in the company.

5. Reviewing and Monitoring the System After Implementation

perating procedures must be monitored. Results of the changes made must be reviewed. Areas that need further changes will b discovered that lead to the enhancement of productivity.

2.2 JIT Contribution in company's competitiveness

The JIT system will help the company in many ways and in many sectors. First of all the JIT program helps the company to eliminate its physical wastes from:

  • The raw materials because JIT want semi-assembled parts.
  • The packaging of raw materials and not assembled products because JIT minimizes the need of them.
  • The scrap from raw material.
  • The defective products because JIT eliminates them and company produces only high quality products.

Also the JIT program assists the company to reduce other kind of wastes such as:

  • Space because of the reduction in raw material, purchased parts and finished goods inventory.
  • Time because of the elimination of waiting products between the phases of production.
  • Money because of the reduction in amount of inventory and workers.
  • Energy because the machines of the industry run only when a product must be produced.

The previously reasons helps the company to reduce the prices of its products and to launch its products in relation with the needs of the market. These lead to increase the competitiveness of the company and support it to gain customers and money.

Don't forget to add examples

Daioku, is an excellent example, an automobile lamps manufacturing company in Taiwan had implemented a JIT program and gained money and competitiveness.

Chapter 3: Automatic Tracking Systems Report

3.1 Introduction

It is important for our company to invest in an automatic tracking system in order to track the Work-In-Progress. They are two systems in the market, which will be analyzed in the following lines.

3.2 Basic characteristics of barcode systems

"A barcode is an optical machine-readable image of data, which illustates certain information on certain products. Initially, barcodes represented information in the widths (lines) and the spacing of parallel lines, and may be referred to as linear or one dimensional barcodes. Alternately, they use patterns of squares, dots, hexagons and other geometric patterns within images termed two dimensional matrix codes. Despite 2D systems use symbols other than bars, they are generally mentioned as barcodes. Barcodes can be read by optical scanners called barcode readers, or scanned from an image by special software."[v]

"A barcode reader (or barcode scanner) is an electronic device for reading printed barcodes. The barcode scanner, it consists of a light source, a lens and a light sensor translating optical impulses into electrical signals. Additionally, nearly all barcode readers contain decoder circuits analyzing the barcode's image information provided by the sensor and transferring the barcode's data to the scanner's output port."[xi]

3.3 Basic characteristics of RFID systems

"Radio-frequency identification (RFID) is the use of an object (typically referred to as an RFID tag) applied to or incorporated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader.

Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The second is an antenna for receiving and transmitting the signal." [xiii]

"There are generally three types of RFID tags:

  • active RFID tags, which contain a battery and can transmit signals autonomously,
  • passive RFID tags, which have no battery and require an external source to provoke signal transmission,
  • battery assisted passive tags (BAP) which require an external source to wake up but have significant higher forward link capability providing great read range." R f i d

RFID has many applications, for example, it is used in enterprise supply chain management to improve the efficiency of inventory tracking and management.

3.4 Main expected benefits from the use of these technologies

3.4.1 Benefits of barcode systems

Barcodes are very useful in shipping, receiving and tracking.

  • When a producer packs a box with any given item, a Unique Identifying Number (UID) can be assigned to the box.
  • A database can be designed to connect the UID to relevant data about the package; such as order number, items packed, qty packed, final destination, etc.
  • The information can be exchanged by email or another type of electronic communication so the client has the data about a shipment before it is received.
  • Tracking results when dispatches are sent to a Distribution Center before being sent to the final destination.
  • When the dispatch arrives to the final destination, the UID is scanned, and the retailer knows where the package came from, what's inside the box, and how much to pay the manufacturer.

The reason barcodes are business-friendly is that the scanners are low cost and extremely accurate compared to key-entry, with only about 1 substitution error in 15,000 to 36 trillion characters entered. The exact error rate depends on the type of barcode.

3.4.2 Benefits of RFID systems [xvii]

The RFID systems have the following benefits:

  • Decrease warehouse and distribution labor costs. Replace the barcode systems of tracking pallets, cases, boxes and products with sensors which can track them from a distance in the industry.
  • Reduce inventory. Inventory precision is significant to helping decrease excess/missing inventory, losses and write downs. With RFID, inventory errors can be eliminated so that the company can be ensured that the inventory indicated is the available inventory.
  • Reduce theft. With RFID, products can be traced from the supply chain to warehouse where a product is and take away inventory errors that lead to packages shipping to other destinations, or to detect where and when in the procedure the product was lost.
  • Improve forecasting and planning. RFID systems can help to track products and to know the exact position in the supply chain.
  • Eliminate out-of stock conditions -- When a product is out of stock the client is often left disappointed, either avoiding the purchase or the customer goes to a competitor in order to buy the item.

3.5 Costing details

3.5.1 Real Costs of RFID System Deployment [xviii]

The following table summarizes all the cost components of a RFID system those they important to invest our company in order to implement a RFID system.

Component            Price From                   Price To
Readers              1.000                       Several Thousands
Tag printers         Several Thousands/Printer    
Middleware           25.000              
Consulting           50.000                      Hundreds Of Thousands

Also they are costs which their price varies depending of the implementation size such as:

  • Technology infrastructure capable of supporting and managing RFID-related data: Can be a significant cost.
  • RFID research and development: Will vary based on the appetite for R&D and includes costs such as labor, testing equipment and consulting.
  • Modifying/extending internal business systems: Includes software upgrades, internal resource costs, and optional costs for third-party custom development or system configuration changes required for each mandate, and integration with RFID infrastructure.
  • Third-party service provider fees: Includes an annual sales-based subscription fees.
  • Labor and training costs: The cost for additional labor will always be needed with today's RFID deployments since suppliers cannot manage full inline integration with their manufacturing equipment.

Make a choice of a system.

Chapter 4: Materials Management - Parts Tracking Systems

4.1 Main advantages of automatic tracking technologies

"The instance-level information available in the Auto-ID system has several potential benefits including the capability to link product identity (in the RFID form) with network technology that will allow retaining the product life-cycle information throughout a global supply-chain. Moreover, the global standard for the Electronic Product Code (EPC) will enable that such life-cycle information be made available in a standardized form for use in any specific application. In manufacturing control, the standards would lead to increased ease in maintaining the product tracking and genealogy related information as well as the dynamic use of process recipes in manufacturing of products or product orders.

The Auto-ID Centre's perusal for standardized read/write protocols across the entire information channel, i.e. tag-to-reader and reader-to-host (which can be Savant or other modules) enables that a highly open communication infrastructure be developed for integrating relevant components from different makes of tags, readers or higher-level data processing modules."[xix]

4.2 Examples of commercially available MM systems

4.3 Functionality, cost, applications of commercially available systems





[iv] George Isaac, "How to Make Just-In-Time Work For You," Traffic Management, February 1987















[xix] NiravC hokshi, Alan Thorne, Duncan McFarlane, 2003, Routes for Integrating Auto-ID Systems into Manufacturing Control Middleware Environments, Institute For Manufacturing, University Of Cambridge

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