As a small to medium sized UK manufacturing firm, you need to be constantly on the look out for ways to improve productivity. But how do you identify the best system for your particular circumstances?
One strong contender is the Just-In-Time (JIT) approach to production, now commonly know as lean manufacturing. Developed by Toyota decades ago, it offers a host of benefits including enhanced productivity and customer satisfaction, and ultimately, improved ROI.
The Background to JIT
That Toyota grew to become the world's preeminent car manufacturer is in no small part due to its development of innovative production systems. In particular, its JIT process, introduced as part of the Toyota Production System (TPS) in the 1960s, allowed the Japanese car-maker to markedly improve productivity, quality and reliability.
How JIT Works to Improve Productivity
The JIT system works to eliminate waste and enhance productivity, mainly through streamlining manufacturing processes and slashing inventory.
Essentially JIT involves manufacturing only what is needed, when it is needed, and in the quantity required at a particular time. It's a demand-pull system in contrast to the traditional production-push approach. Another key component of JIT involves enhancing response and delivery times with suppliers and customers.
How Lean Production Can Improve Productivity
Developing a robust lean manufacturing setup leads to reduced cycle, flow and throughput times. This productivity enhancement leads to speedier delivery of product to market resulting in minimal costs and improved customer satisfaction. An effective JIT system also enables companies to respond rapidly to changing conditions.
Inventory costs money. Businesses have to pay for storage, deliver, handling, insurance and warehouse rents, along with potential obsolescence. Moreover inventory management problems can lead to bottlenecks and shortages of vital components.
Thus any system that can match inventory need and supply delivers operational improvements on many levels. Carrying the essential minimum of stock helps with everything from cash flow to storage and carrying charges. In lean manufacturing, output is determined by actual customer demand which lowers the need to have stock sitting around in warehouses.
Another benefit of JIT is that it works well in conjunction with other popular approaches productivity enhancement. These include Toyota's continual improvement system known as Kanban, and total quality management or TQM.
Clearly, any JIT system depends on highly organised and timely information flows to ensure the whole system is fully optimised. For one thing, it requires having a system in place to measure, analyse, interpret and deliver key metrics. Fortunately such a system is available.
The Key Role of ERP in Lean Manufacturing
JIT systems are complex and require finely tuned operation. This requires the kind of advanced technical support delivered by Enterprise Resource Planning (ERP) software to handle such matters as production scheduling, raw material buying, and inventory estimation.
By gathering and integrating data from all departments within the organisation as well as from partners, suppliers and customers, decision makers are able to streamline business processes, synchronise work-flow, make informed decisions on raw materials acquisition, and take care of quality control.
Only through having a superior knowledge systems in place can decision makers conceptualise, develop and maintain a lean manufacturing environment. Another benefit of ERP software is the way it facilitates automation. Like most else in modern manufacturing, everything begins with having the right ERP system in place.
If you're not maximising your use of lean manufacturing yet, it's time to look into ways to tap into the potential offered by JIT to improve productivity. It's one of the many benefits of using the right ERP system to manage every stage of production with actionable, timely knowledge.