Introduction to Different Production system

Apparel production system is the way of manufacturing process that converts the fabric into garment. It
is an integration of material handling, investment capacity, production processes, personnel and
equipment that helps to plan the work flow and produce a complete garment. As with any
manufactured product, there are different ways to organize the actual production of garments,
according to the type, the amount and the diversity of products to be made. The type apparel of
production system is determined by the quantity of production and the required rate of delivery.

In simple a ‘garment production system’ is a way how fabric is being converted into garment in a
manufacturing system.

The garment production systems are a combination of production processes, materials handling,
personnel and equipment that direct workflow and produce finished garments. It is a system that
depicts how the two-dimensional fabric is transformed into a three-dimensional garment in a
manufacturing system.

The different types of production systems are distinct and require different conditions for working.
However, they should meet the two basic objectives, that is, to meet the specification of the final
product and to be cost-effective in nature. The main aim of any production system is to achieve a
minimum possible total production time. This automatically reduces in-process inventory and its cost.
The subassembly system reduces temporary storage time to zero by combining temporary storage time
with transportation time.

Any production system has four primary factors that make up the system.

Processing time + Transportation time + Temporary storage time + Inspection time = Total Production
Time.

Processing time is the sum total of working time of all operations involved in manufacturing a garment.
Transportation time involves the time taken to transport semi finished or finished garments from one
department to another or from one operation/machine to another. Temporary storage time is the time
during which the garment/bundle is idle as it waits for the next operation or for completion of certain
parts. Inspection time is time taken for inspecting semi finished garments for any defects during
manufacturing or inspecting fully finished garments before packing.

In the apparel industry, the most commonly used production systems are make through, modular
production and assembly line production systems.

Production systems are named according to the various factors, like- number of machine are used to
make a garment, machines layout, total number of operators or tailors involved to sew a complete
garment and number of pieces moving in a line during making a garment. As the fashion industry
evolved and demand of readymade garments are increased, the need of mass production systems
becomes the essential way to meet the market demand. Simply because tailoring shops are not able
produce the volume and supply across the world.

1
Evaluation of garments production systems:
The evaluation of garment production systems can be done by taking into consideration four primary
factors such as

 Processing time: It is the total working time of all the processes involved in assembling a
garment.
 Transportation time: It is the total time consumed for movement of semi finished or finished
garments from one workstation or department to another.
 Waiting time of unfinished garments: It is the idle time of a work bundle when it waits for the
next operation.
 Inspection time: It is time taken for in-process inspection of semi finished garments or final
inspection of finished garments before packing.

Factors of garment production system:

Garment production system depends on some factors. They are:

Company affordability
Equipment that directly involved with workflow
Items of finished products
Machine or floor layout
Management philosophy
Materials handling system
Personnel training
Production processes

2
Types of production systems in the apparel industry:
There are three main types of apparel production system. According to different ways, they are in
below-

Production systems that are based on order quantity

Production systems that are based on customer nature
Production systems that includes on organizational choice

Production systems that are based on order quantity

° Individual production or make through system

° Batch production
° Mass production

Individual production or make through system:

It is the traditional method. In which the entire garment is assembled by one operator like a tailor. Each
product is made only once or in very small quantities. The system requires highly skilled, experienced
operator and versatile machinery. In this system tailor do the all jobs like pattern making, fabric cutting,
finally finish the garments for completing the garment order. This system also called whole garment
production system.

There are two types of whole garment production systems-

 Complete whole garment and

 Departmental whole garment.

Batch production:
It is used for larger, though fixed, quantities of identical products either for stock or to order.

Mass production:
Mass production means that large quantities of identical products are made continuously. The high
utilization of machinery and labor allows a high level of automation and specification.

Production systems that are based on customer nature

° Bespoke production
° Industrial production

Bespoke Production:
This type of production system is including for individual clients or small group of peoples. A garment is
made according to individual size and requirements.

3
Advantages:

 Cost is low.

 No need of pattern.

 Use one or more number of m/cs.

 Low risk.

Disadvantages:

 Fabric wastage is high.

 More time required.

Industrial production:
Industrial production system is use for bulky production, they must follow standard measurement chart
and maintain special requirements for target consumer groups.
Advantages:

 Cost is high.

 Low fabric wastage.

 Takes less time.

Disadvantages:

 Pattern must be needed.

 Many machines are required.

 Risk is high.

Production systems that includes on organizational choice

° Manual systems
° Mechanical system

4
Manual systems:
Manual system is the traditional methods of garment production. This type of production system is
effectively use for creative garment design and where the style variations are large. In manual system
the production quantities are small.

Manual systems are divided into 6 types:

Section or Processes system

Piece rate production system
Clump system
Flexible flow system
One piece flow system or Progressive bundle system
Straight-line or Synchro- system

Mechanical system:
There are 5 types of production system in the apparel industry.

Assembly line production system

Overhead production system or Unit Production System (UPS)
Selective conveyor belt system
Quick response sewing system
Modular Production Systems (MPS)

The choice of best apparel production system will depend on the product and policies of the company
and on the capacities of manpower. The main goal of all the production systems is to decrease the total
production time which leads to reduction in inventory cost. The appropriate selection of a suitable
garment production system for an industry is influenced by the product style and policies of the industry
and on the labor capacity. The cost of inventory decides the choice of a production system in most
circumstances in an apparel industry. When material, labor, space and interest costs are high, a
synchronized subassembly system, which gives the minimum possible in-process inventory, is more
suitable.

Mostly used production systems are as following-

Make through production system.

Section production system.
Progressive bundle production system.

5
 Unit production system
Robotic production system.
Kanban manufacturing production system.
Spray on production system.
3d production system.
Modular production system.
JIT production system.

Make through production system

It is the conventional method of production line where an operator assembles a single piece of garment
at a time by carrying out all the sewing processes necessary to assemble a garment. After completion of
assembling one garment, the operator will start assembling the next one and so on. In this system, an
operator would be provided with a bundle of cut work pieces and would continue to assemble them
based on his or her own method of work. This type of system is efficient when a huge category of
garment styles has to be produced in very few quantities.

Make through production system refers to that production system where all the steps or processes are
done by a single operate. In that case, if half of the processes are done by another person it will not be
making through production system.

For example- A tailor cuts the fabric following the specification sheet and sews it as required using
different types of machine In that case, the production system can be attributed as make through
production system as the full production was done by a single operator.

When a tailor alone makes a complete garment, then it is called as make though systems. The tailor
even makes pattern (use ready-made pattern), cuts fabric and does finishing of the garment. For
example, tailors in the tailor shops do all jobs from cut to pack. In this system tailors are not depended
to others.

The benefits of implementing the make through system are-

Minimum working area.

Quality is ensuring.
Suitable for various styles in a single order.
Suitable for fancy item
Workers free will.
Quick throughput time
Easy to supervise

The shortcomings of the make through system are-

6
Low productivity
High labor cost
It necessitates an experienced operator for assembling
This system is limited to couture and sample making
Time consuming
Labor insensitive.

7
Group system -Section Production System

This system is similar to the progressive bundle system. But the difference is that, instead of one line,
work is divided into sections. Machines of similar operations are clubbed together instead of spreading
over in all lines. For example, when a man’s formal shirt is being made in a section layout – collars, cuffs
and sleeves are in the preparatory sections and then send to the assembly section. This system is
popular to improve line balancing and utilization of human resources. 

This is a development of make through production system. The only difference between these
production systems is in section production system the operators is specialized in any one section of a
garment and he/she sew only that section where in make through production system a single operator
is specialized in all the sections & sew all the components alone.

For example- In section production system the production line or the production unit is divided into
several sections such as sleeves section, front section, back section etc.

This is a development of the individual system, with the difference that the operators specialize in one
major component and sew it from beginning to end. For example, an operator specializing in backs
would assemble the back and yoke, label attaching, etc., and performs all the operations required to
finish that particular component.

In section or processes system more skilled operators are needed to sew garment part from beginning
to the end. This system includes a small influence of personnel changes and easy style changes. Sewing
room has a number of sections; to complete all the operations for every garment component required
more versatile operators. When one section ends then it is passed on to the next section. But this
system is required more time. This section produce garments according to style. Some working steps
are:

 Pre-assembling (preparation of making small parts)

 Front side making

 Back side making

 Main-assembly (closing, setting collar and sleeves,)

 Lining making

 Setting linings

 Finishing operation

The sewing room would have a number of sections, each containing multi-talented operators capable of
performing all the operations required for a specific component. The sections shown in Figure-1 are built
according to the average garment produced, and include:

8
 Ω Collar preparation
Ω Sleeve preparation
Ω Front preparation
Ω Back preparation
Ω Assembling operations (closing, setting collars and sleeves, etc.)
Ω Finishing operations (buttonholes, blind-stitching, etc.)

Figure-1: Group system garment production

Advantages of Section Production System-

In this production system multi-skilled or verse tail worker in not required.

As semi skilled, training workers operators can work in this system so the labor cost
became less then make through system.
Productivity is higher compare to make through production system.
This system is effective when a large variety of garment have to produce in reasonable
quality.
In this production system specialization can be applied easily.

Disadvantages of section production system-

As all labels of workers are involves in this production system, quality of product may
vary.
Though productivity is high, sometimes for simple operations verse tail workers may be
used unnecessary
In this system WIP increase.
As this is not bundle system there is a possibility mixing of the components size and
shade mistake.

9
10
Whole garment production system

There are two types of whole garment production systems: (1) Complete whole garment and (2)
Departmental whole garment. In the whole garment system an individual makes the entire garment
from cutting the cloth to sewing and pressing the garment. The garment is ready for dispatch once the
operator completes the final operation. This type of system is used in few places, which are engaged in
custom-whole sale; they are normally high priced and exclusively made for a particular customer. They
are limited in number and distribution; normally about 10–20 garments are made.

The departmental whole garment system is also used by custom wholesale manufacturers as well as
high price or better dress manufacturers. In the departmental whole garment system one individual
does all the work with the equipment allocated to a department. For example on person does all the
cutting work in cutting department, second person does all the sewing work in sewing department, third
person does the pressing and packing work. The workers in this system may use more than one
equipment to complete his/her job.

Advantages of whole garment production system-

This system is more effective when a very large variety of garments have to be produced in
extremely small quantities.
In individual piece rate system the operators will do with full involvement. To finish more pieces,
to earn more money.
Operator will be specialized in his own working area.
As the pay depends upon the complication of the operation, the operator tries to finish the
complicated operation without any difficulties.
The work in progress (WIP) is reduced, at a time one cut garment to one operator and so the
amount as inventory is reduced.

Disadvantages of whole garment production system-

Labor cost is higher due to the utilization of highly skilled laborers for the particular job.
The operator is more concerned on the number of pieces finished rather than the quality of
work.
Productivity is less due to lack of specialization.
For long run/bulk quantity of same style is not effective in this system.

11
Progressive Bundle System 

Progressive Bundle System (PBS) is also called one piece flow system or material handling system. It is a
traditional production system that widely used in garment manufacturing from early period to still now.
After complete the fabric cutting, then various components of fabric parts are to make bundle and
distributed to the sewing section. Bundle ticket is attached to cut parts. One operator is tried to perform
the same operation on all the parts in the bundle. When one operator finish his/her work then garment
bundles are move from other operator. For sewing a garment, numbers of operators are needed.
Bundles are handling by the Tied bundles, Bags, Pocketed bags, Boxes and baskets, Bundle trucks, etc

This system exactly for the name of employees. This is the system, where the cut panels are number and
bundle as per layer and component and then assembled as per line balance. In this production system
the bundle cut panels are moved through sub assemble and main assemble. The amount of machinery
used in this production system for each operation would be determined by the output required. In this
system there is a task called operation breakdown. That means a products sew able components and
other done able operations will be list down to carry out the work nicely. For every operation we may
need individual labor f operator.

In Progressive bundle system, each operator does different operations of a garment. All sewing
machines needed to make the garment are laid in a line. Cut parts are fed in a bundle form. When an
operator receives a bundle of cut components, she opens the bundle and does her operation (job) for all
pieces of the bundle. After completing her job she moves the bundle to the next operator who is doing
next operation. Numbers of people are involved in sewing a single garment. Major benefits of this
system are – as operators do only single or limited operation, their performances increases. Secondly,
product consistency can be maintained garment to garment. Most of the export oriented garment
manufacturers adopted progressive bundle system as a main production system.  

Most apparel manufacturers believe that the best way to be efficient and achieve economy of scale is by
mass production. The bundle system enables manufacturers to gain economies of scale. The bundle
system, often referred to as the traditional garment production system, has been widely used by
garment manufacturers for several decades. The bundle system is a dedicated system comprising cut
parts, tied into bundles, to complete one or more sections of an apparel product.

The bundle system of apparel production consists of garment parts needed to complete a specific
operation or garment component. Bundles of garments are assembled in the cutting room where cut
parts are matched up with corresponding parts and bundle tickets. The bundles are moved to the
sewing room and given to the garment operator who is scheduled to complete the operation.

PBS is a variation to the bundle system. The main characteristics of the systems are one worker with a
single skill at a single operation, no interaction between operations, piece rate compensation,
maximization of productivity of individual operators, need for extra spaces for material storage, straight
lined equipment layout, and manual material movement in large batches. The system helps operators to
make more units of garments at faster speeds, with high productivity but with more quality problems.
To stabilize the workflow, higher levels of WIP add to production costs, not value, and lead to longer

12
lead times. In these systems, the difference between actual run time and total manufacturing
throughput time is significant. The success of PBS depends on how the production system is set up and
used in a plant.

Advantages of Progressive bundle system-

All level of workers can perform the work.

Production is much higher than section production system.
The individual components are checked by the operators themselves. So the quality becomes
good.
The components are moved as a bundle form. So there is less possibilities of mixing, size, shade.
Gradually specialization and rhythm of work in each productivity
In this system WIP is high, but this system is stable, gives the output at a constant rate.
This production system may allow better utilization of specialized garment production machines,
as output from one special purpose automated garment machine may be able to supply several
garment machine operators for the next operation.
Small garment bundles will allow faster throughput until and unless there are any bottlenecks or
long lead times within operations.

Disadvantages of PBS of garment production-

 The PBS is cost-efficient for individual garment operations. As the garment operators perform
the operation on a daily basis it allows them to increase their speed and productivity, and as a
result they are not willing to learn a new garment operation because it reduces their efficiency
and earnings.
 Operators working in a PBS of garment production are independent of other operators and the
final product.
 Absenteeism, machine failure, and slow processing are also some major bottlenecks in this
system.
 WIP is seen in large quantities in this production system, which leads to longer lead times.
 Poor quality of garments is seen in bundles, which were hidden because of large inventories in
the work process.
 Leads to extra handling and difficulty in controlling inventory in the garment industry.
 Line balancing becomes difficult most of the time.
 Proper planning is requires for each batch and for each style, which takes a lot of time.
 Improper planning leads to poor labor turnover, poor quality and less production.
 Variety of styles of lesser quantity is not effective in this system

13
Overhead Production System (UPS -Unit Production system)

For apparel manufacturing, advance mechanical system like overhead production system or unit
production system (UPS) is use widely. In this system a single garment is transferred automatically via a
computer-controlled overhead handling system to finish the sequence of each operation.

This system is fully automated system and a modern invention is computerized system. In this system
SMV is balance automatically. The operation procedure of this system is there are carries for loading and
transferring cut panels from one operator to another.

It mainly carries the ct panels by an automatic hanger system. In this system the cut panels are added by
an operator and the hanger transfer the cut panel to the operator as required.

As the system is fully automated, there is no bottle neck or WIP. In this system everything is recorded
and reported automatically.

In overhead production system, garment components are clamped in a hanger and the hanger moves on
an overhead rail. In the hanger components of a single piece is clapped. So this is also one kind of single-
piece-flow system.

Unit production system or UPS is a response to competitive pressure because of consumer demands and
increasing global competition. This system requires an automated overhead transporter system to move
individual units from one operation to another instead of human handling of materials in the bundle
system.

Though this production system has been in use for several years, major progress was made when
computers were utilized for production planning, production controlling and regulating the work flow in
the production line.

The important features of this production system are:

 It is mainly concerned with a single garment and not bundles.

 As per the predetermined sequence of processes, the cut garment pieces are
transported automatically from one work station to another.
 The work stations are so constructed such that the cut components are accessible as
near as possible to the operator to reduce the time taken for taking the component and
position the same for sewing.

14
The operational principles of a unit production system (UPS) are as follows:

 All the cut panels for one garment are loaded into a carrier at a workstation specially designed
for this specific job. The carrier is divided into several sections, each having a quick-release
clumplike system to avoid falling out of cut panels during transportation through the system.
 When a particular batch of cut panels of the garments has been fixed into carriers, they are fed
past an electronic device. This device counts and records the number of the carrier and
addresses it to its first destination.
 The loaded carriers are then moved onto the main powered line, which is circulated between
the rows of machines continually. Each workstation is connected to the mainline by means of
junctions, which open automatically if the work on a particular carrier is addressed to that
particular work station.
 The carrier is moving toward the left side of the operator and waits along with the other carriers
in the work station. When the operator has completed the particular work on one carrier, he or
she has to press a push button, which is positioned at the side of the sewing machine, to
activate a mechanism that transports the carrier back to the main line so that another carrier
will be fed automatically to take its place.
 A data collection system records when the carrier left the station and then it is addressed to its
next destination.

Advantages of UPS-

 Bundle holding is completely eliminated.

 The time involved in pickup and delivery is reduce to minimum
 Output is automatically recorded and its eliminate the register.
 There is no need of line balancing.
 This step is time and cost saving.

 Automatically move the garment parts from one work place to other work place.

 Use one hanger that contains more clips to hang all the parts of garment.

 Hanging carrier can be moving in both manual and computerized way.

 Time consuming and little work-in-progress.

 Number of machine can be adjusted.

 Increase productivity and improve quality.

 Reduced labor cost.

 Bundle handling system is completely eliminated.
 Time involved in the pickup and drop is reduced to a minimum.
 Output is automatically recorded, eliminates the operator to register the work.
 Computerized systems in this UPS automatically balance the work between two work stations.

15
  Up to 40 styles can be produced simultaneously on one system.

Disadvantages of UPS-

 These systems need high investment.

 The payment period for the return of investment takes long time.
 Proper planning is required.
 One piece flow.

 High investment required.

 Need proper planning.

 Handling equipments are highly expensive.

 Special training required for labor.

 UPS requires high investments where the payback period is long.
 Planning needs to be effective every time.
 Sometimes the orderly and controlled flow of work via computerized control of the whole
production process becomes difficult to measure.

Modular Production System

In modular production system, group of sewing operators are work together to meet their goal
effectively. Usually 4-15 labors are work in one group. Every members of sewing team helps to each
other to make a high quality garment. For getting quick production this system is more effective. Multi
skilled operators are needed to do this operation. The sewing line layout is set in U –shaped. In modular
production system work-in-progress (WIP) is less.

A group of people who are working together to achieve and individual goal effectively and efficiently
while at the same accomplishing goal of the team and company. In this system line layout is similar to O
shape or U shape with garment progression.

Each operator is assigned at least one operation. In this system WIP is reduce drastically. The first and
the last operation are assigned uniquely to the first and last operator.

In ‘Modular production system’ sewing operators work as a team. Neither they sew complete garment
nor do they sew only single operation. Multi skilled operators form a group and each of the team
members do multiple operations. In modular system, operators help each other to finish the garment

16
quickly and team is fully responsible for quality and production. In modular, always team performance is
measured instead of individual operator performance. This system is very successful where quick
response is needed. 

The modular system of production is basically obtained from the Japanese auto manufacturing and is
regarded as one way to meet the flexibility in demands required in the apparel industry. The modular
system, although dates back to the 1980s, is one of the newest production systems in the apparel
industry. This system is also called a team or cellular system. Pressure from increased market
segmentation and the need for shortened production development cycles and greater operating
flexibility, plus intense competition in standardized product lines from low-wage countries, have forced
apparel manufacturers to experiment with this new production system. Modules use a cross-training
technique, which requires multi skilled workers and a small set of machines to produce a finished
garment. The key principle here is operator/worker involvement and team work, which requires
important changes in the industry’s human resource (HR) department. In this system the workers are
responsible for quality. The main features of the modular system are groups of workers with multiple
skills in one module, group piece rate or hourly rate compensation, U-shaped module, and single piece
hand offs; this system is called Group Technology or cellular manufacturing. Less material handling
drastically reduces inventory levels and throughput time, which saves the cost of inventory and material
handling.

Features of a modular production system-

Unconstrained to work with the operators.

In one workstation, the workers/operators should be able to perform the operations in different
sewing machines in a highly skilled manner.
In this modular production system, in-line inspection locations are constructed into the
production line so that the inspector could be able to return the defective garment panel to the
concerned operator through the system.
Productivity is high in this production system since the operator handles the garment only once
for several operations, instead of handling it for every operation.
Only a few garments will be processed in the particular production line as the throughput time is
less in this system.
A modular production system module could have up to eight work stations positioned around
the transport system.

Advantages of a modular garment production system-

Flexibility is high.

Low wastages.

Employee absence will be low.

Produce high quality garment.

17
 Fashioned garments with quick response.

Order with low volume and frequent changes.

Company with mutual trust between management and operators.

Reduced absenteeism
Reduced repetitive motion ailments
Operator ownership of the production process is high
Empowered employees
Improved quality of product

Disadvantages of a modular garment production system-

Equipment price is high.

Employee training investment is high.

Training time and cost is increased.

It requires considerable changes in management philosophy.

Operators cannot develop the rhythm and pace of high performance.

Specialized equipment is poorly utilized

Individual effort is difficult to recognized within the group

Team members are depends on each other that affects on production.

A high capital investment in equipment
High investment in initial training
High cost incurred in continued training

Robotic production system

This system takes the advantages of all the production systems and eliminates all the disadvantages of
all the systems. This system is operated completely by the help of robotic machineries. These robots
may have artificially intelligent. To operate this system we will be needed highly skilled and technically
sound operators/ technologist.

This system takes a huge investment but can give the production 24/7 without any rest. So the
productivity and profitability increase drastically/enormously. This system runs a project smoothly with
the help f highly skilled and verse tail production planner, industrial engineer, production developer.

18
Each operation may be done by completely different robots. There is no WIP and bottle neck in this
system.

Advantages of this production system-

Productivity is high
Operation cost is low
This system increase profit.
There is no WIP and bottle neck.
This system runs restless.
Extremely time saving
Reduce working defect and increase quality.

Disadvantages of this production system-

Skilled worker is required.

Setup cost is high.

Spray on production system

This is a unique production system where the product is developed directly n the wears body or on the
dress pomp or mold. In this system there is n need of cutting or sewing, no need of procuring, raw fabric
and storing it.

This system needs no measurement chart or technical specification sheet that point’s different
measurement of the body pats. It may require technical specification sheet which contents different
information on clothing material attach with the garment and the garment form size.

For this system we will be needed specific dress form. The raw of the final product is caned under high
pressure n which a spray nozzle is attached. The raw material stone in the can is in liquid form where
liquid solution is produced by mixing several fiber particles with different types of binding agent fixing
agent and colorant. The final product is washable, regenerative, and flexible and verse tail.

3d production system

This is one of the most advanced production system in the world. In this system there is n need of
storing, cutting, numbering, bundling, sewing and finishing and also no need of operator. Only single
technical person/operator can run 100’s of achiness and these machine will do the rest. This machine is

19
known 3d printing machine. This machine takes the input solid or liquid, natural or polymer resign and
gives the output of final product. This machine can run 24/7. In this system the tack-pack sheet will be in
sorted in the cloud operating system. A single operating system will control 100’s of machine .

JIT production system

Just-in-time (JIT) manufacturing, also known as just-in-time production or the Toyota Production System
(TPS) is a methodology aimed primarily at reducing times within production system as well as response
times from suppliers and to customers. Its origin and development was in Japan, largely in the 1960s and
1970s and particularly at Toyota.

Alternative terms for JIT manufacturing have been used. Motorola's choice was short-cycle
manufacturing (SCM). IBM's was continuous-flow manufacturing (CFM), and demand-flow
manufacturing (DFM), a term handed down from consultant John Constanza at his Institute of
Technology in Colorado. Still another alternative was mentioned by Goddard, who said that "Toyota
Production System is often mistakenly referred to as the 'Kanban System'", and pointed out that kanban
is but one element of TPS, as well as JIT production.

But the wide use of the term JIT manufacturing throughout the 1980s faded fast in the 1990s, as the
new term lean manufacturing became establishedas "a more recent name for JIT". As just one
testament to the commonality of the two terms, Toyota production system (TPS) has been and is widely
used as a synonym for both JIT and lean manufacturing

Just-in-time (JIT) is a production model in which items are created to meet demand, not created in
surplus or in advance of need. The purpose of JIT production is to avoid the waste associated with
overproduction, waiting and excess inventory, three of the seven waste categories defined in the Toyota
Production System (known in North America as the lean production model).

JIT was firstly developed within Toyota manufacturing plants by Taiichi Ohno, during the beginning of
the 70s. The oil embargo probably triggered his theory, the program was intended to avoid wastes,
reduce inventories and increase production efficiency in order to maintain Toyota’s competitive edge.
Besides he believed that customers should be satisfied with maximum quality in the shortest time.

JIT production system is known as TPS (Toyota production system). This a mythology aimed primarily
and reducing flow time with in production system as well as response time from suppliers and to
customer. JIT manufacturing system was first implement in Toyota auto mobile industry. Seeing its
benefits and advantages others industries like apparel industry has adapted this system.

JIT manufacturing system has some tools or elements that help to run this system smoothly. These
elements/tools are:

1. MRP I
2. MRP II
3. KAIZEN
4. KANBAN
5. Self inspection
6. Push and pull system

20
 7. People
8. Planed layout
9. Research etc.

In this system each and every raw material should be locally manufactured otherwise it will be quit
impossible to run this system in our country o anywhere in the world.

The JIT concept was described by Henry Ford in his 1923 book, My Life and Work:

We have found in buying materials that it is not worthwhile to buy for other than immediate needs. We
buy only enough to fit into the plan of production, taking into consideration the state of transportation
at the time. If transportation were perfect and an even flow of materials could be assured, it would not
be necessary to carry any stock whatsoever. The carloads of raw materials would arrive on schedule and
in the planned order and amounts, and go from the railway cars into production. That would save a
great deal of money, for it would give a very rapid turnover and thus decrease the amount of money
tied up in materials.

If we highlight JIT then….

 IT philosophy means getting the right quantity of goods at the right place and the right time.

 JIT exceeds the concept of inventory reduction.

 JIT is an all-encompassing philosophy found on eliminating waste.

 Waste is anything that does not add value.

A broad JIT view is one that encompasses the entire organization.

Objective of JIT:

Produce only the products the customer wants.

Produce products only at the rate that the customer wants them.

Produce with perfect quality.

Produce with minimum lead time.

Produce products with only those features the customer wants.

Produce with no waste of labor, material or equipment –every movement must have a purpose
so that there is zero idle inventory.

Produce with methods that allow for the development of people.

21
Benefits touted as results of JIT implementation include:

Reductions in down time.

Reductions in inventory.

Reductions in scrap and re-work.

Reductions in workspace.

Increased inventory turns.

Increased labor utilization.

Increased equipment utilization.

Improved service to customers.

Advantages of JIT production system-

Lower stock holding means a reduction in storage space which saves rent and insurance costs.
As stock is only obtained when it is needed, less working capital is tied up in stock.
Less likelihood of stock perishing, becoming obsolete or out of date.
Less time spent on checking and re-working production as the emphasis is on getting the work
right first time.

Disadvantages of JIT production system-

There is little room for mistakes as minimal stock is kept for re-working faulty product.
Production is highly reliant on suppliers and if stock is not delivered on time, the whole
production schedule can be delayed
There is no spare finished product available to meet unexpected orders, because all products is
made to meet actual orders.
A need for complex, specialist stock systems.

Some other production system:

Quick response sewing system

Quick response sewing system specially use for small lot order. Every work station will assemble with 4-5
machines. Operators are completed their all the operations in that station before it is moved to other

22
work station. If there is a bottleneck in one section, the overload is automatically moved to other
stations where operator capacity is available. All the garment parts are hanged on the hanging clamp
that attached to the trolley. It is a computer controlled and overhead trolley system.

Selective conveyor belt system

It is the very common mechanical equipment handling system. In conveyor system automatically feed
the materials or working containers to one operator to other. This system is more popular in material
handling and apparel manufacturing industries. For saving the time and quick production this system is
more effective.

A typical conveyor system is mainly three types-

 Main conveyor

 Top belt

 Lower belt

One Piece Flow System

Instead of making a bundle of multiple pieces, bundle is made with all components of a single piece.
Sewing machines in One-piece-flow system can be laid in a straight line or modular line. Main difference
is that, operator will receive one piece from back and move one piece to his next operator after
completing his work. Benefits of One-piece-Flow system are less through put time, Less WIP in the line. 

Piece Rate Production System

Piece rate system also one of the most popular production system in small and unorganized factories.
Though people called it piece rate system, actually it is not a production system. Whatever Production
system is used as mentioned above, when operators are paid according their works (how many pieces
produced), is named as piece rate system.

KANBAN manufacturing tool production system

Kanban (看板) (signboard or billboard in Japanese) is a scheduling system for lean manufacturing and
just-in-time manufacturing (JIT).Taiichi Ohno, an industrial engineer at Toyota, developed kanban to

23
improve manufacturing efficiency. Kanban is one method to achieve JIT.The system takes its name from
the cards that track production within a factory. For many in the automotive sector, kanban is known as
the "Toyota nameplate system" and as such the term is not used by some other automakers.

Kanban became an effective tool to support running a production system as a whole, and an excellent
way to promote improvement. Problem areas are highlighted by measuring lead time and cycle time of
the full process and process steps. One of the main benefits of kanban is to establish an upper limit to
work in process inventory to avoid overcapacity. Other systems with similar effect are for example
CONWIP. A systematic study of various configurations of kanban systems, of which CONWIP is an
important special case, can be found in Tayur (1993), among other papers.

A goal of the kanban system is to limit the buildup of excess inventory at any point in production. Limits
on the number of items waiting at supply points are established and then reduced as inefficiencies are
identified and removed. Whenever a limit is exceeded, this points to an inefficiency that should be
addressed.

This is a scheduling system for lean manufacturing and JIT manufacturing system.

KANBAN is also known as inventory control system. It is sometimes attributed as supply chain
management system.

TAICHIOHNO and industrial engineer at Toyota mobile industry develop KANBAN to improve
manufacturing efficiency.

This system is similar to CONWIP (controlling work in progress)

KANBAN manufacturing system reduces 20% process time for applying properly, KANBAN has been
divided into several types, among them two types are widely used.

There are two types of Kanban. Such as-

P KANBAN - Production
T KANBAN – transport

The Origins of Kanban

As with Just in Time manufacturing the idea behind kanbans comes very much from Toyota and their
observation of a supermarket (Piggly Wiggly) operated in the US. The supermarket would only replenish
what was taken by the customers from the shelves; this meant that shelves never overflowed with
excess stock or ran empty. This pull was transferred from the customers all the way back to the various
suppliers.

Just in Time was implemented and designed at Toyota by Taiichi Ohno who took over 15 years to perfect
their system. During the 1970’s many western visitors would bring back Kanban cards and want to
implement the systems within their own manufacturing facilities; often with little real understanding of

24
how they worked. It was not until the 1980’s that Kanban control really started to be understood in the
West.

Kanban Rules

The later process collects product from the earlier process

The later process informs the earlier process what to produce

The earlier process only produces what the later process needs

No products are moved or produced without Kanban authority

No defects are passed to the later process

Decreasing the size or number of kanbans within the system will increase the systems sensitivity to
changes or problems. This is often the best way to highlight issues within the process and to drive
improvements.

Implementing a Kanban System Means That:

Earlier processes never push production onto later processes

Nothing is ever made without Kanban authority
Nothing is made if there are no Kanbans
You have to be able to identify defects as close to the source as possible
You cannot operate with large batches or lots of plan changes
Where possible demand should be smoothed

Ideal Environment for Kanban Implementation

The following are the ideal conditions required for the use of Kanban. The further you are from these
conditions the harder it will be to implement and the larger the safety margin you will want to build into
the system to prevent problems:

Regular demand from the customer; if your customer demand is highly irregular and difficult to
predict it can be hard to hold Kanban stocks in the traditional supermarket style. You may end
up holding larger than necessary stock and work in progress levels without some careful thought
about organizing your system.
Low product variation; if you make many hundreds or even thousands of different products
then you will not want to hold stocks of them all as this could easily increase the amount that
you hold. You will want to reduce this burden by ensuring that there are many commonly used

25
 parts between products and that you make the product unique as late in the process as
possible.
Clear flow; facilities that are organized in a silo style with all similar processing being done in
one location are hard to control with a kanban system; although not impossible by any means. A
better arrangement is one in which all processes are organized together to provide a flow line or
cell.
Small dedicated machines; many companies will invest in large all singing all dancing machines
that will service all products that they make. Often these machines will drive the use of large
batches and will be a bottleneck for the facility. Far better if smaller dedicated machines are
used within product flow lines.
Quick changeovers; many machines and processes can take a long time to set up to run a new
product or variant. This again drives large batches and can create significant bottlenecks within
your production. The use of Single Minute Exchange of Die (SMED) techniques can make a
significant impact in this area.

Repeatable and reliable processes; if machines are prone to breaking down and processes are
not repeatable then it will be hard to control any form of production system let alone Kanban.
The use of Total Productive Maintenance (TPM), 5S, operator driven quality improvements, and
standardized operations will help you to put in place the foundations that are required.

Reliable suppliers; your suppliers are a vital part of your process and you will need to ensure
that they are able to support the kanban processes that you wish to implement reliably.

Not having these conditions does not mean that you cannot implement Kanban and Just in Time. It just
means that you will have to put a little more thought into how your systems are designed and how they
will work. Irregular demand and large variations in products for instance can require you to use CONWIP
systems rather than the more usually seen cards or bin systems. While unreliable machines will require
you to have a larger safety factor in the quantities that you use within your system.

Often when you are starting out with JIT and Kanban you will start with large Kanban quantities and
slowly reduce the amount of stock over time in a planned fashion to highlight and remove problems.
Lowering the inventory levels will uncover the many issues that are there.

Pull production system

A pull system is a Lean technique for reducing the waste of any production process. Applying a pull
system allows you to start new work only when there is a customer demand for it. This gives you the
opportunity to reduce overhead and optimize storage costs.

This is a system where production is based on actual daily demand in this production, information, flows
from market to management.

In pull production systems, the product is manufactured in response to a specific demand. The order is
used to trigger a pulling action from the end of the production line (e.g., from the last workstation). If

26
that workstation cannot fill the order, it requests additional units from the preceding workstation. This
action continues with each following workstation requesting units from its predecessor workstation.

Example of this production system is JIT production system.

A method of production control in which downstream activities signal their needs to upstream activities.
Pull production strives to eliminate overproduction and is one of the three major components of a
complete just-in-time production system.

In pull production, a downstream operation, whether within the same facility or in a separate facility,
provides information to the upstream operation, often via a kanban card, about what part or material is
needed, the quantity needed, and when and where it is needed. Nothing is produced by the upstream
supplier process until the downstream customer process signals a need. This is the opposite of push
production.

There are three basic types of pull production systems-

Supermarket Pull System

The most basic and widespread type, also known as a fill-up or replenishment or a-type pull system. In a
supermarket pull system each process has a store—a supermarket—that holds an amount of each
product it produces. Each process simply produces to replenish what is withdrawn from its supermarket.
Typically, as material is withdrawn from the supermarket by the downstream customer process, a
kanban or other type of information will be sent upstream to the supplying process to withdraw
product. This will authorize the upstream process to replace what was withdrawn.

Each process is responsible for the replenishment of its supermarket, so daily management of the
worksite is relatively simple and kaizen opportunities are relatively easy to see. The disadvantage of a
supermarket system is that a process must carry an inventory of all part numbers it produces, which
may not be feasible if the number of part numbers is large.

Sequential Pull System

A sequential pull system—also known as a b-type pull system—may be used when there are too many
part numbers to hold inventory of each in a supermarket. Products are essentially "made-to-order"
while overall system inventory is minimized.

In a sequential system, the scheduling department must set the right mix and quantity of products to be
produced. This can be done by placing production kanban cards in a heijunka box, often at the beginning
of each shift. These production instructions then are sent to the process at the upstream end of the
value stream. Often this is done in the form of a “sequence list,” sometimes called a “sequential tablet.”
Each following process simply produces in sequence the items delivered to it by the preceding upstream
process. FIFO of individual products must be maintained throughout.

27
A sequential system creates pressure to maintain short and predictable lead times. In order for this
system to work effectively, the pattern of customer orders must be well understood. If orders are hard
to predict, production lead time must either be very short (less than order lead time) or an adequate
store of finished goods must be held.

A sequential system requires strong management to maintain, and improving it may be a challenge on
the shop floor.

Mixed Supermarket and Sequential Pull System

Supermarket and sequential pull systems may be used together in a mixed system—also known as a c-
type pull system. A mixed system may be appropriate when an 80/20 rule applies, with a small
percentage of part numbers (perhaps 20%) accounting for the majority (perhaps 80%) of daily
production volume. Often an analysis is performed to segment part numbers by volume into (A) high, (B)
medium, (C) low, and (D) infrequent orders. Type D may represent special order or service parts. To
handle these low-running items, a special type D kanban may be created to represent not a specific part
number but rather an amount of capacity. The sequence of production for the type D products is then
determined by the method the scheduling department uses for sequential pull system part numbers.

Such a mixed system enables both supermarket and sequential systems to be applied selectively and the
benefits of each are obtained, even in environments where the demand is complex and varied. The two
systems may run together, side-by-side horizontally, throughout an entire value stream, or may be used
for a given part number at different locations along its individual value stream.

How to Manage a Pull System?

Nowadays, the pull system concept is widely spread across various industries. Professionals use it not
only in manufacturing but also in software development, customer support and more.

In the context of workflow management, a pull system allows workers to pull their next task if they have
the capacity to start working on it. This may help you prioritize tasks better and prevent teams from
overloading. By doing so, your team can stay focused on executing the most important work just in time

Advantages of Using a Pull System

Unlike push systems, which force team members to work on multiple tasks, a pull system lets team
members focus on a single work item at a time. This approach allows a work unit to:

Quickly adapt to changes that may occur in the work process

Scale the optimal capacity of your team
Deliver work items much faster
Reduce waste of resources

28
 Increase productivity
Improve flow efficiency

Manufacturing facilities greatly benefit from switching from a push system to a pull system. Using a pull
system reduces waste within a company since no overproduction occurs. This also frees up space in the
workplace and reduces the cost of storing excess inventory.

Businesses that use a pull system experience increased customer satisfaction as products are
manufactured specifically to fulfill their requests. Since products are made in small quantities, quality
issues will be identified faster than with a push system and, if an error is found, less defective products
would require disposal.

A pull system allows manufacturing facilities to save time that would be spent planning for future
demand and producing goods that may never be sold. They also experience increased flexibility, as they
can rapidly respond to changes in demand. Each of these advantages of using a pull system reduces total
costs for the business, whether directly or indirectly, resulting in increased profit

Push production system

This manufacturing system is based on projected production plan where information flows from
management to market.

In a push system the emphasis lies on using information about customers, suppliers and production to
manage material flow. The name push system results from the way the system
Works: Materials and parts are made and after that they are send to the place where they are needed
next (which is another stage in production or inventory), thus the system is pushing material through
production. This pushing however is done according to schedule.
The push system is relying heavily on the accuracy of the schedules, which come from the
MPS. These schedules, in turn, depend on the accuracy of information about the customers demand and
lead times. So for this information another system is developed: Resource Requirements Planning
System (RRPS). RRPS is all the planning that is directed at determine the amount and timing of
production resources (personnel, cash, materials, production capacity) needed in the short-range
planning horizon. MPS, CRP and MRP are important elements of this planning. Push systems are used in
almost every type of production, but there are more benefits in job shop environments. In these
environments the push system provides comprehensive information to improve short run production
and management decisions.

Example of this production system is MRP (material require plan)

The push system of inventory control involves forecasting inventory needs to meet customer demand.
Companies must predict which products customers will purchase along with determining what quantity
of goods will be purchased. The company will in turn produce enough products to meet the forecast
demand and sell, or push, the goods to the consumer. Disadvantages of the push inventory control
system are that forecasts are often inaccurate as sales can be unpredictable and vary from one year to
the next. Another problem with push inventory control systems is that if too much product is left in
inventory. This increases the company's costs for storing these goods. An advantage to the push system

29
is that the company is fairly assured it will have enough products on hand to complete customer orders,
preventing the inability to meet customer demand for the product.

An example of a push system is Materials Requirements Planning, or MRP. MRP combines the
calculations for financial, operations and logistics planning. It is a computer-based information system
which controls scheduling and ordering. Its purpose is to make sure raw goods and materials needed for
production are available when they are needed.

Pull System vs. Push System

Another system used in supply chains is a push system, which sharply contrasts with a pull system. In a
push system, units are produced based on forecasted demand and then pushed into the market,
whereas a pull system uses actual demand. Companies using a push system must predict what the
customer will want to purchase and in what quantity, which is difficult as sales can be unpredictable and
vary from previous years.

In a pull system, the quantity produced is just enough to meet current demand. However, in a push
system, products are mass produced for estimated future demand. These products must remain in
inventory until they are needed, which could take months, years or may not happen at all.

Push (make all we can just in case.)

Production approximation
Anticipated usage’s
Large lots
High inventories
Waste
Management by firefighting
Poor communication

Pull (make what’s needed when we need it)

30
 Production precision
Actual consumption
Small lots
Low inventories
Waste reduction
Management by sight
Better communication.

Common, but misleading illustration of push and pull

One of the key differences in lean production is to use pull production rather than push production.
While pretty much everyone knows (at least in theory) how to implement it using kanban, the
underlying fundamental differences are a bit more fuzzy. But what exactly is the difference between
push and pull? Also, what makes pull systems so superior to push systems?

It turns out that most definitions are going in the wrong direction. Even the names “push” and “pull” are
actually not well suited to describe the concept. Neither are common illustrations, including the one
here in the upper left.

MRP

Material requirements planning (MRP) is a system for calculating the materials and components needed
to manufacture a product. It consists of three primary steps: taking inventory of the materials and
components on hand, identifying which additional ones are needed and then scheduling their
production or purchase.

Joseph Orlicky, author of the definitive Material Requirements Planning (MRP): the New Way of Life in
Production and Inventory Management, said, "Never forecast what you can calculate." Nowhere is this
rule more evident than in the manufacturing industry, where determining the right amount of raw
material for current demand is a challenge. Underestimating will force you to short your clients, causing
them to seek the products elsewhere. Overestimating will cost you money in either waste or storage. 

Material requirements planning (MRP) is a planning and control system for inventory, production, and
scheduling. MRP converts the master schedule of production into a detailed schedule, so that you can
purchase raw materials and components. Used mostly in the manufacturing and fabrication industries,
this system is a push type of inventory control, meaning that organizations use forecasting to determine
the customer demand for products. The manufacturing or fabrication company will forecast the amount
and type of products they will purchase, along with the quantity of materials to produce them. They
then push the products to the consumers. This contrasts with a pull system, where the customer first
places an order. The main disadvantage of a push system is its vulnerability when sales vary. In this
scenario, the forecasts become inaccurate, which for manufacturing, cause either a shortage of
inventory or an excess of inventory that requires storage. 

Inventory is divided into two categories, independent and dependent demand. Independent demand is
a desire for finished products, such as cell phones or automobiles, whereas dependent demand is the

31
demand for components, parts, or incomplete assemblies (sometimes called sub-assemblies), such as
phone screens or tires for automobiles. You determine quantities for the dependent demand by
determining quantities for the independent demand. For example, if you forecast your independent
demand for the number of completely assembled cell phones that you expect to sell, you can forecast
the quantities of your dependent demand materials, such as your screens, processors, batteries, and
antennas. These part quantities depend on the quantity of cell phones you want to produce. This
relationship between the materials and the finished product are shown on a bill of materials (BOM) and
are calculated with MRP. 

However, manufacturing is only one industry that relies on the appropriate balance between supply and
demand. Whether you work in a bakery or in a technology firm, implementing material requirements
planning (MRP) concepts can dramatically benefit your company. Although originally intended
exclusively for the manufacturing and fabrication industries, MRP is applicable to almost any industry,
including the service industry. This is because MRP focuses on two universal concerns of business —
customers and resources. MRP analyzes all company activities in terms of customer demands and
manages all company resources via its own logic and data processing.

Material requirements planning (MRP) is a production planning, scheduling, and inventory control
system used to manage manufacturing processes. Most MRP systems are software-based, but it is
possible to conduct MRP by hand as well.

An MRP system is intended to simultaneously meet three objectives:

Ensure materials are available for production and products are available for delivery to
customers.

Maintain the lowest possible material and product levels in store

Plan manufacturing activities, delivery schedules and purchasing activities.

Objectives of material requirements planning

Not surprisingly, the primary objective of MRP is to make sure that material and components are
available when needed in the production process and that manufacturing takes place on schedule.

Effective inventory management and optimization is another goal of MRP. While MRP is designed to
ensure adequate inventory at the required times, a company can be tempted to hold more inventory
than is necessary, thereby driving up inventory costs.

MRP can also improve manufacturing efficiency by using accurate scheduling to optimize the use of
labor and equipment.

32
Proponents of MRP and DDMRP say these approaches can help achieve a better matching of supply and
demand. This achievement, in turn, can reduce product costs and increase revenues as customer
demand is fully met and no revenue opportunities are lost from missed ship dates or inventory
shortfalls.

The scope of MRP in manufacturing

Dependent demand vs. independent demand

Independent demand is demand originating outside the plant or production system, while dependent
demand is demand for components. The bill of materials (BOM) specifies the relationship between the
end product (independent demand) and the components (dependent demand). MRP takes as input the
information contained in the BOM.[5] [6]

The basic functions of an MRP system include: inventory control, bill of material processing, and
elementary scheduling. MRP helps organizations to maintain low inventory levels. It is used to plan
manufacturing, purchasing and delivering activities.

"Manufacturing organizations, whatever their products, face the same daily practical problem - that
customers want products to be available in a shorter time than it takes to make them. This means that
some level of planning is required."

Companies need to control the types and quantities of materials they purchase, plan which products are
to be produced and in what quantities and ensure that they are able to meet current and future
customer demand, all at the lowest possible cost. Making a bad decision in any of these areas will make
the company lose money. A few examples are given below:

If company purchases insufficient quantities of an item used in manufacturing (or the wrong
item) it may be unable to meet contract obligations to supply products on time.

If company purchases excessive quantities of an item, money are wasted - the excess quantity
ties up cash while it remains as stock that might never be used at all.

Beginning production of an order at the wrong time can cause customer deadlines to be missed.

MRP is a tool to deal with these problems. It provides answers for several questions:

 What items are required?

 How many are required?

 When are they required?

MRP can be applied both to items that are purchased from outside suppliers and to sub-assemblies,
produced internally, that are components of more complex items.

33
In determining how much material your product needs, MRP differs from consumption-based planning
(CBP). MRP logic uses information received either directly from customers or from the sales forecast,
calculating the material required based on the dependencies of other materials. CBP calculates material
requirements only via historical consumption data. CBP does not consider the dependencies between
different materials, as it presumes that future consumption will follow the same pattern that the
historical data did. 

MRP synchronizes the flow of materials, components, and parts in a phased order system, considering
the production schedule. It also combines and tracks hundreds of variables, including:

Purchase orders

Sales orders

Shortage of materials

Expedited orders

Due dates

Forecasts

Marketplace demand

Material

Inventory

Data

Bill of material

For all companies, MRP has a few goals in common. These include making sure that the inventory level is
at a minimum, but high enough to provide for the customer need, and that you plan all of the activities,
including delivery, purchasing, and manufacturing. 

There are some terms that will come up in MRP repeatedly. Some are terms related to MRP as a
concept, and some are specific to MRP software. These terms are as follows:

Item: In MRP, an item is the name or code number used for the event you’re scheduling.

Low-Level Code: This is the lowest level code of an item in the bill of materials and indicates the
sequence in which you run items through an MRP. You use low-level code because an MRP
system recognizes and connects the level that an item appears in the product chain and uses it
to plan the proper time to meet all of the system demands.

Lot Size: This is the quantity of units you order during manufacturing

34
Lead Time (LT): This is the time you need to assemble or manufacture an item from beginning to
end. Two types of lead time are ordering lead time and manufacturing lead time. Ordering lead
time is the time it takes from  starting the purchase  to receiving the purchase. Manufacturing
lead time is the time it takes for the company to completely manufacture a product from start
to end.

Past Due (PD): This is the time during which you consider orders behind schedule.

Gross Requirements (GR): You generate this MRP calculation  through forecast scheduling using
the number of produced units, the amount of required material for each produced unit, the
current stock, and the ordered stock /stock in transit. This is the total demand for an item during
a specific time period.

Scheduled Receipts (SR): These are the open orders for products that the company currently
possesses but has not yet fulfilled.

Projected on Hand (POH): This is the amount of inventory you’ve estimated to be available after
you meet the gross requirements. To calculate this sum, you add the POH from the previous
time period to the scheduled order receipts and the planned order receipts and then subtract
the gross requirements. (Current POH = Previous POH + SR + POR – GR)

Net Requirements (NR): You generate this MRP calculation through master scheduling using
gross requirements, on-hand inventory, and other quantities. This is the actual, required
quantity to be produced in a particular time period.

Planned Order Receipts (POR): The quantity of orders during a time period that is expected to
be received. This planning for orders keeps the inventory from going below the threshold
necessary.

Planned Order Releases (PORL): This is the amount you plan to order per time period. This is
POR offset by the lead time.

Cumulative Lead Time: This is the greatest amount of time that it takes to develop the product.
You may calculate it by looking at each BOM and figuring out which one takes the longest.

Product Structure Tree: This is a visual depiction of the bill of materials, showing how many of
each part and how many sub-parts you need to produce the product.

35
 Net-Change Systems: These are systems which identify only the changes between the new and
old plan.

Master Production Schedule (MPS): This is the schedule of finished products that drives the
MRP process. The quantities in MPS represent what you need to produce to meet the forecast.

Lumpiness: This is when product/material that is low or at zero suddenly spikes. Examples of
lumpy or uneven demand include the need for service parts. You only need service parts when
an appliance breaks, so forecasting the need for the parts may be difficult, as the demand is not
continuous. 

Time Fence: Time fences are boundaries between different MRP planning periods. They offer
the opportunity for programming changes, such as rules and restrictions.

Benefit of Material Requirements Planning

You may use MRP concepts in a variety of different production environments. You may also use them for
service providers, such as job shops. Examples of production environments include instances in which
products are complex, products are only assembled to order, or demand items are discrete and
dependent. In these cases, MRP can reduce the stored inventory, the component shortages, the overall
manufacturing cost, and, therefore, the cost to purchase. This more accurate scheduling improves your
company’s productivity by decreasing the necessary lead time, giving your customers a higher quality of
production and service. Overall, your company is more competitive in the marketplace.

36
However, with these advantages come a few drawbacks. Foremost, MRP is only successful if the
accounting is accurate. You must keep records of inventory and BOM changes up to date. Inaccurate
input causes inaccurate output. Another potential downside to MRP is that it can be costly. If you don’t
keep the input in a timely fashion, it can be difficult and expensive when switching over to a new
system. 

Material Requirements Planning Steps and Processes

MRP works because it is a well-organized framework of processes and calculations. An MRP system can
completely transform a company’s operational procedures. Many people within an organization
contribute to the MRP process, including sales, production, purchasing, receiving, stockroom, and
shipping personnel. 

MRP consists of three basic steps: 

 Identifying the Quantity Requirements: Determine what quantity is on hand, in an open

purchase order, planned for manufacturing, already committed to existing orders, and
forecasted. These requirements are specific to each company and each company location and
change with the date.

 Running the MRP Calculations: Create suggestions for materials that you consider critical,
expedited, and delayed.

 Complete the Orders: Delineate the materials for the manufacturing orders, purchase orders,
and other reporting requirements. 

37
The calculations that MRP performs are based on the data inputs. As shown in the diagram above, these
data inputs include:

 Customer Orders: This refers to the specific information you receive from customers and
includes one-offs and regular ordering patterns.

 Forecast Demand: This is a prediction from the marketplace about how much probable demand
there will be for a product or service. It is based on historic accounting and current trend
analysis.

 Master Production Schedule (MPS): Both forecast demand and customer orders feed into the
master production schedule. The MPS is a plan that a company develops for production, staffing,
or inventory. It is the production future plan that includes the quantities you need to produce
the products in a specified time period. It also includes

38
  inventory costs, production costs, inventory information, supply, lot size, lead time, and
development capacity.

 Bill of Materials (BOM): Also called a product structure file, this includes the details and
quantities of the raw materials, assemblies, and components that make up each end product.

Data

The data that must be considered include-

The end item (or items) being created. This is sometimes called independent demand, or Level
"0" on BOM (bill of materials).

How much is required at a time.

When the quantities are required to meet demand.

Shelf life of stored materials.

Inventory status records. Records of net materials available for use already in stock (on hand)
and materials on order from suppliers.

Bills of materials. Details of the materials, components and sub-assemblies required to make
each product.

Planning data. This includes all the restraints and directions to produce such items as: routing,
labor and machine standards, quality and testing standards, pull/work cell and push commands,
lot sizing techniques (i.e. fixed lot size, lot-for-lot, economic order quantity), scrap percentages,
and other inputs.

Outputs

There are two outputs and a variety of messages/reports-

° Output 1 is the "Recommended Production Schedule." This lays out a detailed schedule of the
required minimum start and completion dates, with quantities, for each step of the Routing and
Bill Of Material required to satisfy the demand from the master production schedule (MPS).

° Output 2 is the "Recommended Purchasing Schedule." This lays out both the dates on which the
purchased items should be received into the facility and the dates on which the purchase orders
or blanket order release should occur in order to match the production schedules.

39
Messages and reports-

 Purchase orders. An order to a supplier to provide materials.

 Reschedule notices. These recommend cancelling, increasing, delaying or speeding up existing

orders.

Methods to find order quantities

Well-known methods to find order quantities are-

Dynamic lot-sizing

Silver–Meal heuristic

Least-unit-cost heuristic

Mathematical formulation

MRP can be expressed as an optimal control problem-

Initial conditions:

i=1,...,J

Dynamics:

t=0,...,T-1,i=1,...,J

Constraints:

t=1,...,T,i=1,...,J

Where x' is local t=0,...,T-1,i=1,...,J inventory (the state),

z the order size (the control), d is local
demand, k represents Objective: fixed order costs, c
variable order costs, h local inventory
holding costs. δ() is the Heaviside
function. Changing the dynamics of the
problem leads to a multi-item analogue
of the dynamic lot- size model.

40
Problems with MRP systems

Although using an MRP system is vastly superior to cobbling together a system of spreadsheets and
hand calculations, problems do arise. The biggest issue is data integrity. Data that is either not up to
date or has errors gives output that is inaccurate and can end up costing your business

serious money. You should carefully screen inventory and BOM data. Errors often occur during cycle-
count adjustments, input and shipping, and reporting of scrap, damage, waste, and production. Barcode
scanning and pull systems can minimize these types of errors. 

Moreover, MRP systems can be rife with error when companies with facilities in different countries do
not set up by individual location. For example, the MRP system could indicate that there is plenty of raw
materials available for production when, in fact, that raw material is on the other side of the world. Staff
power is also not always accounted for in MRP. In these cases, the MRP creates a capacity issue.

In addition, lead times can throw off MRP. The required lead time can change based on the product.
MRP assumes that the lead time is always the same for each product, regardless of changes in supply,
required quantities, or the possible simultaneous production of other products.

Solving your data-integrity issues may take some concentrated effort. Best practices for ensuring that
your data is high-quality before you start your MRP process include:

 Using barcode scanning or a pull system to replace stock and enter products into inventory

 Making sure that shipping prints the container labels

 Requiring advance shipping notifications (ASN) from your suppliers that feed into a label system.
In order to detect shortages and over-shipments, match labels with internal company numbers
as product arrives. 

 Recording scrap daily

 Troubleshooting and fixing causes of cycle counts that incorrectly change your inventory 

 Confirming the bill of material at the production site

Integrity of the data. If there are any errors in the inventory data, the bill of materials
(commonly referred to as 'BOM') data, or the master production schedule, then the output data
will also be incorrect ("GIGO": garbage in, garbage out). Data integrity is also affected by
inaccurate cycle count adjustments, mistakes in receiving input and shipping output, scrap not
reported, waste, damage, box count errors, supplier container count errors, production
reporting errors, and system issues. Many of these type of errors can be minimized by

41
 implementing pull systems and using bar code scanning. Most vendors in this type of system
recommend at least 99% data integrity for the system to give useful results.

Systems require that the user specify how long it will take for a factory to make a product from
its component parts (assuming they are all available). Additionally, the system design also
assumes that this "lead time" in manufacturing will be the same each time the item is made,
without regard to quantity being made, or other items being made simultaneously in the
factory.

A manufacturer may have factories in different cities or even countries. It is not good for an
MRP system to say that we do not need to order some material, because we have plenty of it
thousands of miles away. The overall ERP system needs to be able to organize inventory and
needs by individual factory and inter-communicate the needs in order to enable each factory to
redistribute components to serve the overall enterprise. This means that other systems in the
enterprise need to work properly, both before implementing an MRP system and in the future.
For example, systems like variety reduction and engineering, which makes sure that product
comes out right first time (without defects), must be in place.

Production may be in progress for some part, whose design gets changed, with customer orders
in the system for both the old design, and the new one, concurrently. The overall ERP system
needs to have a system of coding parts such that the MRP will correctly calculate needs and
tracking for both versions. Parts must be booked into and out of stores more regularly than the
MRP calculations take place. Note, these other systems can well be manual systems, but must
interface to the MRP. For example, a 'walk around' stock intake done just prior to the MRP
calculations can be a practical solution for a small inventory (especially if it is an "open store").

The other major drawback of MRP is that it fails to account for capacity in its calculations. This
means it will give results that are impossible to implement due to manpower, machine or
supplier capacity constraints. However this is largely dealt with by MRP II. Generally, MRP II
refers to a system with integrated financials. An MRP II system can include finite or infinite
capacity planning. But, to be considered a true MRP II system must also include financials. In the
MRP II (or MRP2) concept, fluctuations in forecast data are taken into account by including
simulation of the master production schedule, thus creating a long-term control. [8] A more
general feature of MRP2 is its extension to purchasing, to marketing and to finance (integration
of all the functions of the company), ERP has been the next step.

Solutions to data integrity issues

Bill of material – The best practice is to physically verify the bill of material either at the
production site or by disassembling the product.

Cycle count – The best practice is to determine why a cycle count that increases or decreases
inventory has occurred. Find the root cause and correct the problem from occurring again.

42
 Scrap reporting – This can be the most difficult area to maintain with any integrity. Start with
isolating the scrap by providing scrap bins at the production site and then record the scrap from
the bins on a daily basis. One benefit of reviewing the scrap on site is that preventive action can
be taken by the engineering group.

Receiving errors – Manual systems of recording what has been received are error prone. The
best practice is to implement the system of receiving by ASN from the supplier. The supplier
sends an ASN (advanced shipping notification). When the components are received into the
facility, the ASN is processed and then company labels are created for each line item. The labels
are affixed to each container and then scanned into the MRP system. Extra labels reveal a
shortage from the shipment and too few labels reveal an over shipment. Some companies pay
for ASN by reducing the time in processing accounts payable.

Shipping errors – The container labels are printed from the shipper. The labels are affixed to the
containers in a staging area or when they are loaded on the transport.

Production reporting – The best practice is to use bar code scanning to enter production into
inventory. A product that is rejected should be moved to an MRB (material review board)
location. Containers that require sorting need to be received in reverse.

Replenishment – The best replenishment practice is replacement using bar code scanning, or via
pull system. Depending upon the complexity of the product, planners can actually order
materials using scanning with a min-max system .

Demand driven MRP

In 2011, the third edition of "Orlicky's Materials Requirements Planning" introduced a new type of MRP
called "demand driven MRP" (DDMRP.The new edition of the book was written, not by Orlicky himself
(he died in 1986) but by Carol Ptak and Chad Smith at the invitation of McGraw Hill to update Orlicky's
work.

Demand driven MRP is a multi-echelon formal planning and execution technique with five distinct
components:

1. Strategic inventory positioning – The first question of effective inventory management is not,
"how much inventory should we have?" Nor is it, "when should we make or buy something?"
The most fundamental question to ask in today's manufacturing environments is, "given our
system and environment, where should we place inventory to have the best protection?"
Inventory is like a break wall to protect boats in a marina from the roughness of incoming
waves. Out on the open ocean the break walls have to be 50–100 feet tall, but in a small lake the
break walls are only a couple feet tall. In a glassy smooth pond no break wall is necessary.

2. Buffer profiles and level – Once the strategically replenished positions are determined, the
actual levels of those buffers have to be initially set. Based on several factors, different materials
and parts behave differently (but many also behave nearly the same). DDMRP calls for the
grouping of parts and materials chosen for strategic replenishment and that behave similarly
into "buffer profiles." Buffer profiles take into account important factors including lead time

43
 (relative to the environment), variability (demand or supply), whether the part is made or
bought or distributed and whether there are significant order multiples involved. These buffer
profiles are made up of "zones" that produce a unique buffer picture for each part as their
respective individual part traits are applied to the group traits.

3. Dynamic adjustments – Over the course of time, group and individual traits can and will change
as new suppliers and materials are used, new markets are opened and/or old markets
deteriorate and manufacturing capacities and methods change. Dynamic buffer levels allow the
company to adapt buffers to group and individual part trait changes over time through the use
of several types of adjustments. Thus, as more or less variability is encountered or as a
company's strategy changes these buffers adapt and change to fit the environment.

4. Demand-driven planning – takes advantage of the sheer computational power of today's

hardware and software. It also takes advantage of the new demand-driven or pull-based
approaches. When these two elements are combined then there is the best of both worlds;
relevant approaches and tools for the way the world works today and a system of routine that
promotes better and quicker decisions and actions at the planning and execution level.

5. Highly visible and collaborative execution – Simply launching purchase orders (POs),
manufacturing orders (MOs) and transfer orders (TOs) from any planning system does not end
the materials and order management challenge. These POs, MOs and TOs have to be effectively
managed to synchronize with the changes that often occur within the "execution horizon." The
execution horizon is the time from which a PO, MO or TO is opened until the time it is closed in
the system of record. DDMRP defines a modern, integrated and greatly needed system of
execution for all part categories in order to speed the proliferation of relevant information and
priorities throughout an organization and supply chain.

These five components work together to greatly dampen, if not eliminate, the nervousness of traditional
MRP systems and the bullwhip effect in complex and challenging environments. The Demand Driven
Institute claims the following: In utilizing these approaches, planners will no longer have to try to
respond to every single message for every single part that is off by even one day. This approach provides
real information about those parts that are truly at risk of negatively impacting the planned availability
of inventory. DDMRP sorts the significant few items that require attention from the many parts that are
being managed. Under the DDMRP approach, fewer planners can make better decisions more quickly.
That means companies will be better able to leverage their working and human capital as well as the
huge investments they have made in information technology. One down-side, however, is that DDMRP
cannot run on the majority of MRPII/ERP systems in use today, so organizations will have to implement
a compatible system in order to run DDMRP.

DDMRP has been successfully applied to a variety of environments including CTO ( configure to order),
MTS (make to stock), MTO (make to order) and ETO (engineer to order).[6] The methodology is applied
differently in each environments but the five step process remains the same. DDMRP leverages
knowledge from theory of constraints (TOC), traditional MRP & DRP, Six Sigma and lean. It is effectively
an amalgam of MRP and kanban techniques. As such, it incorporates the strengths of both but also the
weaknesses of both; hence its limited adoption.

44
MRP II
The full meaning of MRP2 is Manufacturing Resource Planning. The technology of MRP expended in
1980 to create new approach called Manufacturing resource planning or MRP2.

In manufacturing resource planning (MRP2) the valid production schedule proved itself to be so
successful that organization knows that resource could be better controlled and planned with valid
schedule. In the book of production planning and controlling writer Gordon Minty noted that-“By the
improvement in cash flow projections, personal management projection and customer delivery
commitments the main areas affected were marketing, personal and finance”.

With master production schedule MRP2 facilities the improvement of detailed production schedule used
for machine and labor capacity, provide schedule when the production is to run according t the arrival of
materials. It provides the data for the cost of production including labor time, material used and
machine time, also MRP2 provides final production numbers to finance and accounting departments.

MRP2 or manufacturing resource planning is too beyond from MRP1. When MRP stopped receiving the
dock, MRP2 includes the flow of value all the way to the shipping dock through the manufacturing
facility where the product is first packaged and then dispatched to the final customer. The stream value
includes machine capacity scheduling, planning, analysis modules, demand forecasting and quality
tracking tools. MRP2 come up with some tools for tracking labor contribution margin, employee
attendance.

MRP2 maintains track of functions and specific characteristic of the entire organization. Example
includes, but it is not just limit to, the following-

Product specification
Quality control
Product design
Quality assurance
Order management
Shop floor control
Inventory
Purchasing
Cost calculation
General accounting
Cost reporting
Tax calculating
Cash flow
Tax payment

45
Manufacturing resource planning (MRP2) helps business to standardize their process by providing then
mechanize methods for different areas of the business. Standardization provides easily repeated process
and a platform which helps to improve those processes. Implementing MRP2 by the company for the
first time is generally having problems in controlling the increasing transactions in manufacturing,
purchasing associated with the growth. MRP2 enables employees to do more in those business areas
and have better visibility of the information for their jobs. MRP2 allows being more competitive to the
company by improving in the way works get done.

Benefits of MRP2-

 Better control of inventories

 Productive relationship with
 Better quality and also control quality
 Improve design control
 Improve cash flow through fast delivery
 Accurate inventory records
 Reduced working capital for inventories.

Disadvantages of MRP2-

Once implemented MRP2 it will require accurate information. Errors will result in automated planning
process if the information is used in poor quality in either the bill of material module or the inventory
area. To manufacture or purchase the planning part use averages for the length of time (lead time), and
on purchase order o manufactured quantities that is generally purchase n wok order (lot size). If the
actual lot sizes produced or purchased and lead times fluctuates consistently then the software will not
be able to produce plans that match with current scenario. Lack of understanding and poor information
of then impact on average lead times and lot sizes can cause execution failure and costly
reimplementation.

It is long time that MRP2 is introduced in industry and business. For proper understanding of the
application aspects staff must be fully trained and for achieving benefits from MRP2 commitment for
implementation is pre-requisite. Most of the companies in the world having MRP2 are implementing
(Enterprise Resource Planning) ERP gain maximum productive results with highly effective software.

ROP

The reorder point (ROP) is the level of inventory which triggers an action to replenish that particular
inventory stock. It is a minimum amount of an item which a firm holds in stock, such that, when stock
falls to this amount, the item must be reordered. It is normally calculated as the forecast usage during
the replenishment lead time plus safety stock. In the EOQ (Economic Order Quantity) model, it was
assumed that there is no time lag between ordering and procuring of materials. Therefore the reorder

46
point for replenishing the stocks occurs at that level when the inventory level drops to zero and because
instant delivery by suppliers, the stock level bounce back.

Reorder Point (ROP) system is a process where the inventory is restored as soon as the existing stock
hits a specific bottom. This will help in ensuring that there is no interruption in the production and also
saves on extra costs. Given the fact that every item has its own importance and a usage rate in the
production process, the reorder point differs for every item. It also is dependent on several other factors
such as discounts, delivery time of the item and so on. With the evolution of ERPs, this process is
automated and hence very simple to perform. All the crucial is tracked in the system and is taken care
of. Early ordering also helps in cutting down high costs put forth by vendors and administers good
negotiation.

A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is
taken to replenish the stock. The order point is normally calculated as forecasted usage during the
replenishment lead time plus safety stock. Syn: reorder point, statistical order point, trigger level. See:
fixed reorder quantity inventory model.

ROP also known as re-order point is the level of inventory which triggers an action to re-order that
particular inventory stock. It represents a minimum amount of an item (such as button or zipper) which
a firm holds in stock, when stock falls to this amount, the item must be reordered. It is normally
calculated as the forecast usage during the replenishment lead time plus safety stock.

The reorder point for replenishment of stock occurs when the level of inventory drops down to zero. In
view of instantaneous replenishment of stock the level of inventory jumps to the original level from zero
level.

In real life situations one never encounters a zero lead time. There is always a time lag from the date of
placing an order for material and the date on which materials are received. As a result the reorder point
is always higher than zero, and if the firm places the order when the inventory reaches the reorder
point, the new goods will arrive before the firm runs out of goods to sell. The decision on how much
stock to hold is generally referred to as the order point problem, that is, how low should the inventory
be depleted before it is reordered.

The two factors that determine the appropriate order point are the delivery time stock which is the
Inventory needed during the lead time (i.e., the difference between the order date and the receipt of
the inventory ordered) and the safety stock which is the minimum level of inventory that is held as a
protection against shortages due to fluctuations in demand.

Therefore:

Reorder Point = Normal consumption during lead-time + Safety Stock.

Several factors determine how much delivery time stock and safety stock should be held. In summary,
the efficiency of a replenishment system affects how much delivery time is needed. Since the delivery
time stock is the expected inventory usage between ordering and receiving inventory, efficient
replenishment of inventory would reduce the need for delivery time stock. And the determination of
level of safety stock involves a basic trade-off between the risk of stock out, resulting in possible

47
customer dissatisfaction and lost sales, and the increased costs associated with carrying additional
inventory.

Another method of calculating reorder level involves the calculation of usage rate per day, lead time
which is the amount of time between placing an order and receiving the goods and the safety stock level
expressed in terms of several days' sales.

Reorder level = Average daily usage rate x lead-time in days .

From the above formula it can be easily deduced that an order for replenishment of materials be made
when the level of inventory is just adequate to meet the needs of production during lead-time.

It can be explained by following examples:

Reorder Point = Normal consumption during lead-time + Safety Stock & · Reorder level = Average daily
usage rate x lead-time in days

If the average daily usage rate of a material is 100 units and the lead-time is seven days, then: Reorder
level = Average daily usage rate x Lead time in days = 100 units per day x 7 days = 700 units

When the inventory level reaches 700 units an order should be placed for material. By the time the
inventory level reaches zero towards the end of the seventh day from placing the order materials will
reach and there is no cause for concern.

Re-order point = Average Lead Time*Average Demand + Service Level*√Avg. Lead Time*Standard
Deviation of Demand2 + Avg. Demand2*Standard Deviation of Lead Time2

Reorder point = S x L + J (S x R x L)

Where,

 S = Usage in units per day

 L = Lead time in days

 R = Average number of units per order

 J = Stock out acceptance factor

 The stock-out acceptance factor, `J', depends on the stock-out percentage rate specified and the
probability distribution of usage (which is assumed to follow a Poisson distribution).

48
Reorder Point (ROP) Calculator - Know When to Reorder

You have a great new product on the shelves, and it’s selling fast. Every customer purchase means more
revenue, but also brings your inventory levels lower. Of course you’ll reorder before it goes out of stock,
but if you order too early, you’ll need to spend more on storing these excess items. If you order too late,
you’ll be facing disappointed customers who’ll look to your competitors.

How to calculate reorder point?

Calculate your lead time demand in days.

Calculate your safety stock in days.

Sum your lead time demand and your safety stock to determine your Reorder Point.

To understand the math’s behind our reorder point calculator, let’s break this formula down.

You’ll need to know the lead time demand, because that’s how long you’ll have to wait before new stock
arrives - you’ll want to have enough to satisfy your customers while you wait! And you’ll need to know
your safety stock, because that’ll protect you against any unexpected occurrences. Add your lead time
demand to your safety stock… and voila! Once your stock levels hit the total, it’s time to place a new
order to replenish your supply.

Lead time demand - Shipping’s not instant!

New stock doesn’t arrive immediately. Even if your products are in stock, it’ll take your supplier time to
pack your order and even more time to ship it over to you. This waiting time is what’s known as “lead
time”.

So let’s put things into perspective. Imagine a business (let’s call it J Timewear) in the United States sells
watches manufactured in China. Assuming the supplier is always in stock and has a warehouse full of
watches ready to ship at a moment’s notice, it’ll probably take the supplier a couple of days to pick and
pack the watches. After that, the watches spend another five days in a truck to the port, and from there,
it takes about 30 days for a ship to travel from China to the U.S.. Once the watches arrive, they spend
another week in customs, and then another three days travelling to J Timewear’s warehouse.

49
Calculating the lead time is easy: Just add everything up!

2 + 5 + 30 + 7 + 3 = 47 days of sales

Since it takes J Timewear 47 days to get a new shipment of watches, they’ll need to have enough stock
on hand to cover these 47 days of sales.

But knowing the lead time alone isn’t enough. You’ll also need to figure out the demand during this
period. Assuming J Timewear sells an average of 310 watches a month (310/31 = 10), they’d be selling
about 10 watches a day.

50
So the lead time demand for J Timewear is (47 x 10 = 470)... meaning J Timewear will need 470 watches
to tide them over until their next shipment arrives, if nothing unexpected happens.

Safety Stock - When things go wrong

But sometimes, unexpected things happen. This can take the form of a sudden surge in demand after
some unexpected celebrity endorsement, and now your product is selling fast. Or perhaps your
supplier’s factory has experienced a breakdown and it’ll take a week for them to replace the damaged
component and get their machine up and running again.

And here’s where safety stock comes in. Safety stock is buffer stock you carry as a last defense against
unpredictable events that either deplete your stock (surge in demand), or unexpected manufacturing
time (your lead time skyrockets because the supply chain breaks down). Of course you’d like to have
enough safety stock to bring the likelihood of going out of stock down to zero, but most of the time
that’s not financially viable. After all, safety stock IS for a rainy day that may never come! So how do we
decide then on how much stock to keep on standby?

Here’s a simple formula that you can calculate based off your purchase and sales orders history:

51
Let’s continue the story of J Timewear. On an average day, they sell 10 watches. But during weekends,
they can sell as many as 15. As for lead times, their usual lead time is 47 days, but during typhoon
season (yes, in China, they have typhoons) , it can go up to as high as 54 days.

(15 x 54) - (10 x 47) = 340

This means J Timewear needs to have about 340 units of safety stock on hand to guard against the
unexpected (especially during typhoon season). Therefore, with 340 units in safety stock, selling about
80 watches on a good week (10 per day on weekdays and 15 on weekends), J Timewear will have
enough stock to last a little over 4 weeks.

Your safety stock can cater for all the variations in demand and lead time, providing you with enough
stock on hand to weather unexpected occurrences. Everyone and their entire family wants your
products? It’s time to sell your safety stock. Supplier needs an extra week because he’s caught in the
middle of a typhoon? It’s time to sell your safety stock.

If your product is seasonal, like school supplies, you’ll have to adjust your safety stock level to cater to
peak season demand. Once the peak season’s passed, it’s time to reduce your safety stock levels again,
as more safety stock = higher carrying costs. After all, people are a lot less likely to be buying a new set
of school stationery in the middle of summer holidays as opposed to right before a new semester
begins.

The reorder point formula

To complete the story of J Timewear, their reorder point would be:

470 (Lead time demand) + 340 (safety stock) = 810

So once their stock hits 810 watches, J Timewear will need to place a new order with their supplier. At
810 watches, they’ll have enough to last them as they wait for new stock to arrive (470), while holding
enough stock (340) as a buffer against an unexpected surge in demand or supply chain problems.

52
Planning reorder points are a crucial part of inventory management. Setting your reorder point to the
optimum amount lets you cut down on excess spending, while ensuring you’ll have enough stock for
your customers even when things take an unexpected turn.

But how can you always ensure you’ll be able to place a fresh order whenever inventory levels hit the
reorder point? Keeping tabs on how much you’ve sold every day is easy when you’re starting out with a
single store. But as you start selling more and more, across different channels, manually recording every
sale becomes a pretty exhausting chore. And if you only tally up your numbers on a weekly basis,
missing the reordering point becomes a likely possibility.

If missing the reordering point sounds like it’ll be a concern, you may want to look into getting an
inventory management software system for your business. It’ll track your inventory movement across all
channels, and once your stocks hit the reorder point, you’ll be prompted to place a new purchase order.
That way, you won’t have to keep worrying about keeping an eye on your inventory with the stock
control software doing your work for you.

Automating your inventory processes means everyone wins. You won’t need to put items on backorder
and tell your customers “Oh, I’m sorry, we’re out of stock and we can’t get new stock for another week”
and disappointing them. As for your customers, they’ll soon know that you’re a seller that’s always able
to deliver, and now that you’ve won their trust, they’ll always be coming back for more.

Advantages:

One of the key benefits of this system is that it allows a smooth inventory flow with no halts in
between. This further builds on the inventory discipline of your business.

Makes space to identify procurement issues and helps in resolving the same leading to a
smoother process.

Makes sure that the stock is available at all times and thus avoids any production glitches.

Unnecessary expenditure in stocking and maintaining the inventory is reduced.

Helps the business to take appropriate decisions by helping to track the entire procurement
procedure.

53
Introduction to factory dynamics

It refers to those terms which are directly or indirectly affect or effect the overall production. Such as-
WIR, Throughput time, Critical bottle neck calculation, Work scheduling, Working law, Working ethics,
Supply chain and logistics management etc.

What is throughput time?

It stands for arrival rate. This is the velocity or speed of production and it is calculated by determining
how many items have been produced on a certain period of time.

Throughput time can be calculated by little’s law.

WIP
Throughput time ¿
CT

Throughput time is the amount of time required for a product to pass through a manufacturing process,
thereby being converted from raw materials into finished goods. The concept also applies to the
processing of raw materials into a component or sub-assembly. The time required for something to pass
through a manufacturing process covers the entire period from when it first enters manufacturing until
it exits manufacturing - which includes the following time intervals:

Processing time: This is the time spent transforming raw materials into finished goods.

Inspection time: This is the time spent inspecting raw materials, work-in-process, and finished goods,
possibly at multiple stages of the production process.

Move time: This is the time required to move items into and out of the manufacturing area, as well as
between workstations within the production area.

Queue time: This is the time spent waiting prior to the processing, inspection, and move activities.

The concept of manufacturing throughput time is primarily oriented toward the reduction of time
required by the manufacturing process, so that you can increase the amount of throughput flowing
through your system and thereby increase profitability. Throughput is net sales minus totally variable
expenses. The bulk of the time spent in manufacturing tends not to be in processing, but rather in the
inspection, move, and queue times noted above. Thus, it is easiest to reduce manufacturing throughput
time by eliminating as much inspection, move, and queue time as possible.

54
Example of Manufacturing Throughput Time-

The production manager of ABC International wants to calculate the manufacturing throughput time for
its blue one-armed widget. He accumulates the following information:

Processing time = 3 hours

Inspection time = 0.5 hours

Move time = 1 hour

Queue time = 12 hours

Thus, the total manufacturing throughput time for the blue one-armed widget product is 16.5 hours.
Further, the production manager has a golden opportunity to reduce the throughput time, since the
amount of queue time is nearly three-quarters of the total throughput time, and can probably be
reduced without too much trouble.

What is cycle time?

Cycle times mean total time for completing a single task. It also known as average time but to calculate
average time we have to take several cycle times.

The total time from the beginning to the end of your process, as defined by you and your customer.
Cycle time includes process time, during which a unit is acted upon to bring it closer to an output, and
delay time, during which a unit of work is spent waiting to take the next action.

In a nutshell, cycle time is the total elapsed time to move a unit of work from the beginning to the end of
a physical process.

(Note: cycle time is not the same as lead time).

Cycle time calculated based o 5 steps. Such as-

1. Take
2. Set
3. Process
4. Realize
5. Delivery

55
Cycle time can be calculated by little’s law.

WIP
Cycle time ¿
Throughut time

Little’s law is the theory of probability. Little’s law is used for reducing cycle time.

Reducing cycle time by using little’s law:

Increasing through put time.

Reducing WIP.
Introducing advance methods and technology for first work.
Introducing training secession.
Counseling secession.
Extra facilities and compliance.
Developing industrial engineering department.

Cycle Time vs. Lead Time

A lot of practitioners tend to confuse Cycle Time with Lead Time. Some people say Cycle Time is the time
between two successive deliveries, while others believe it is the time between initiation and delivery.

In simple terms, Cycle time is the time starting when an operation begins to the point of time when the
operation ends. Then what is Lead Time?

Lead time starts when a request is initiated and ends with delivery. Let’s say a customer orders a
product on November 6. The company receives the order instantly, and delivers the product on
November 10, yet work on the product begins November 8.

Therefore, the Lead Time here is 4 days, while the Cycle Time is 2 days. Lead time represents the time
expended—but not the effort. You could have a Lead Time of 25 days yet spend only 2 hours working to
solve the problem or create the product.

At first glance, Cycle Time may appear to represent effort, but it represents time, as well. That’s why
cutting cycle time should be the most important mantra for any Continuous Improvement project.

How to calculate Cycle Time?

Cycle time is the time between commencement and completion of a process, therefore, in a customer
call centre; the cycle time for a customer phone call may be the time difference between answering the
call and call completion. In a manufacturing company, involved in large capital products, the cycle time

56
may similarly be the time from raw material receipt through to the time the item of production finishes
final inspection.

The formula for cycle time = 1/Throughput rate. Where: Throughput rate = (Units Produced or Tasks
completed)/ Time

Cycle Time calculation in a continuous process.

In the vast majority of instances, there will be numerous products or services being processed at any
one time, therefore the cycle time calculation needs to be modified as follows:

Cycle time = Average time between completion of units.

Example: Consider a manufacturing facility, which is producing 100 units of product per 40 hour week.
The average throughput rate is 1 unit per 0.4 hours, which is one unit every 24 minutes. Therefore the
cycle time is 24 minutes on average.

Cycle Time calculation for batch processing.

Consider a pharmaceutical company producing product in batch format. Each batch may consist of
10,000 units of product. The cycle time is normally calculated as per the continuous process previous,
however, the batch is considered the unit of measure, so that the cycle time is give as a batch cycle time.

57
Example: In a pharmaceutical company, 100 batches of product, of batch size 1000 units are produced in
a 40 hours week. The cycle time here is normally given as 24 minutes to produce a single batch of 1000
units.

Cycle Time calculation in a service process.

The service industry covers a broad range of process types, such as meal preparation and provision in
restaurants, maintenance and repair of electrical and mechanical equipment, many government bodies,
the financial industry etc.. Measuring and continually reducing cycle time is critical to continued success.

Example: Consider a restaurant serving 20 meals per hour. On average one meal is served every 3
minutes. If the cycle time can be reduced, then it may allow a higher throughput of customers (if that is
the focus of the restaurant).

Example: Consider a bank, where customers go into the bank to complete financial transactions. If on
average one bank counter employee can complete the transaction requests of 10 customers per hour,
then on average the cycle time of each customer is 6 minutes. Can this be reduced by having the
customer complete forms in advance of getting to the desk, or by simplifying processes so that the cycle
time per customer is reduced?

Reducing the cycle time should increase customer satisfaction, plus improve operating efficiency for the
bank.

WIP

What is Work-in-Progress (WIP)

WIP means work in progress. That means how much work has to be done but has not done yet. This is
main cause of bottle neck.

There are several effective ways to reduce WIP and control bottle neck. Such as-

Calculating WIP level properly. For this we can use a simple formula. Such as-
Total output – total input.

Analyzing present SMV.

Performance evaluation.
Remaking work study.
Sharing capacity.
Adding additional manpower and machine.

58
 Improving work station layout.
Better operator allocation
Introduction incentive system.
Using time saving tricks.

Work-in-progress (WIP) is a production and supply-chain management term describing partially finished
goods awaiting completion. WIP refers to the raw materials, labor, and overhead costs incurred for
products that are at various stages of the production process. WIP is a component of the inventory asset
account on the balance sheet. These costs are subsequently transferred to the finished goods account
and eventually to cost of sales.

Work in process (WIP),work in progress (WIP),goods in process,[1] or in-process inventory are a

company's partially finished goods waiting for completion and eventual sale or the value of these items.
[8] These items are either just being fabricated or waiting for further processing in a queue or a buffer
storage. The term is used in production and supply chain management.

Optimal production management aims to minimize work in process. Work in process requires storage
space, represents bound capital not available for investment and carries an inherent risk of earlier
expiration of shelf life of the products. A queue leading to a production step shows that the step is well
buffered for shortage in supplies from preceding steps, but may also indicate insufficient capacity to
process the output from these preceding steps.

WIP in construction projects

Work-In-Process in construction accounting identifies the value of construction projects which are
currently being worked on by the construction firm. To properly account for each project, four values
are needed for each project at the end of any given month (or period):

The Sales Price (excluding sales tax) for the project,

The total Cost Estimate for the project,
The Costs-To-Date,
The Billed-To-Date.

By taking the Costs-To-Date divided by the Cost Estimate, the "percentage complete" for the project is
calculated. For example:

Assume a project is estimated to cost $70,000 by the time the work is complete

Assume at the end of December, $35,000 has been spent to date for the project

59
$35,000 divided by $70,000 is 50%, therefore, the project can be considered 50% complete at December
31.

Calculation of the Percentage complete is a valuable tool in determining how much the client should be
billed - it is important that Billings, and even collection of these billings, are greater than the costs
expended to do the work. This ensures that the client is directly funding the construction work, and that
the contracting firm minimizes borrowing on behalf of the client. Using the example above, suppose the
following:

The Sales Price of the project is $100,000

$100,000 times 50% (the level of completion) = $50,000

Therefore, for the period ending December 31, the client should be invoiced at least $50,000 to properly
fund the work.

BREAKING DOWN Work-in-Progress (WIP)

WIP is a concept used to describe the flow of manufacturing costs from one area of production to the
next, and the balance in WIP represents all production costs incurred for partially completed goods.
Production costs include raw materials, labor used in making goods, and allocated overhead.

The Differences between Job Costing and Process Costing-

For accounting purposes, process costing differs from job costing, which is a method used when each
customer job is different. Job costing tracks the costs (e.g., cost of materials, labor, and overhead) and
profits for a specific job, and it allows accountants to trace expenses for each job for tax purposes and
for analysis (scrutinizing costs to see how they can be reduced). For example, XYZ Roofing Company
provides their residential clients' bids for roof repair or replacement; each roof is a different size and will
require specific roofing equipment and a varying number of labor hours. Each bid lists the labor,
material, and overhead costs for the work.

On the other hand, a process costing system tracks, accumulates, and assigns costs associated with the
manufacturing of homogenous products. Consider a company that manufactures plastic combs. The
plastic is put into a mold in the molding department and is then painted before being packaged. As the
combs move from one department (molding to painting to packaging) to another, more costs are added
to production.

How Costs Are Assigned to WIP

When the combs are manufactured, plastic is moved into production as a raw material; then labor costs
are incurred to operate molding equipment. Since the combs are only partially completed, all costs are
posted to WIP. When the combs are completed, the costs are moved from WIP to finished goods, with
both accounts being part of the inventory account. Costs are moved from "Inventory" to "Cost of Goods
Sold (COGS)" when the combs are eventually sold.

60
Factoring in Units of Production:

Accountants use several methods to determine the number of partially completed units in WIP. In most
cases, accountants consider the percentage of total raw material, labor, and overhead costs that have
been incurred to determine the number of partially completed units in WIP. The cost for raw materials is
the first cost incurred in this process because materials are required before any labor costs can be
incurred.

Implications for Investing:

WIP, along with other inventory accounts, can be determined by various accounting methods across
different companies. Thus, it is important for investors to discern how a company is measuring its WIP
and other inventory accounts. One company's WIP may not be comparable to another. Allocations of
overhead can be based on man-hours or machine-hours, for example.

Compete Risk Free with $100,000 in Virtual Cash:

Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of
Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you
start risking your own money. Practice trading strategies so that when you're ready to enter the real
market, you've had the practice you need.

Bottleneck

In production and project management, a bottleneck is one process in a chain of processes, such that its
limited capacity reduces the capacity of the whole chain. The result of having a bottleneck are stalls in
production, supply overstock, pressure from customers and low employee morale.[1] There are both
short and long-term bottlenecks. Short-term bottlenecks are temporary and are not normally a
significant problem. An example of a short-term bottleneck would be a skilled employee taking a few
days off. Long-term bottlenecks occur all the time and can cumulatively significantly slow down
production. An example of a long-term bottleneck is when a machine is not efficient enough and as a
result has a long queue.

An example is the lack of smelter and refinery supply which cause bottlenecks upstream.

Another example is in a surface-mount technology board assembly line with several pieces of equipment
aligned. Usually the common sense is driven to set up and shift the bottleneck element towards the end
of the process, inducing the better and faster machines to always keep the printed circuit board (PCB)
supply flowing up, never allowing the slower ones to fully stop, a fact that would be heeded as a
deleterious and significant overall drawback on the process.

61
Identifying bottlenecks

Almost every system has a bottleneck, even if it is a minor one, if every system was running at full
capacity, at least one machine would be accumulating processes.[4] Identifying bottlenecks is critical for
improving efficiency in the production line because it allows you to determine the area where
accumulation occurs. The machine or process that accumulates the longest queue is usually a
bottleneck, however this isn't always the case. Bottlenecks can be found through: identifying the areas
where accumulation occurs, evaluating the throughput, assessing whether each machine is being used
at full capacity and finding the machine with the high wait time.

Since many flow units (e.g. customers in a shop, patients in a hospital) do not at all need the very same
treatment or service, business processes have to serve different needs. Processing times thus might be
quite different for each flow unit as well; even the path of flow units through the process might differ.
For such processes with so-called multiple flow units, we need new tools to figure out which process
step can be seen as the bottleneck.

Finding the bottleneck in a multiple flow unit scenario takes four easy steps:

Step 1: Determine the capacity of each resource in the process (m / activity time or units per hour)

Step 2: Calculate the service demand for each of these resources considering multiple flow units

Step 3: Add multiple unit demand for every resource to calculate total demand for the resource

62
Step 4: Divide the total demand by the capacity of the resource to calculate the implied utilization

The highest implied utilization indicates the bottleneck process step. To differentiate between the
implied utilization and the “regular” utilization, its best to keep this important difference in mind:

Utilization = flow rate / capacity (always between 0% and 100%)

Implied utilization = demand / capacity (can very well exceed 100%)

The same calculation can also be done by looking at the required work time:

Step 1: Determine the work time capacity of each resource (e.g. 2 workers x 60 min = 120 min)

Step 2: Calculate the demand for work time at each resource considering multiple flow units

Step 3: Add multiple unit demand for every resource to calculate total demand for the resource

Step 4: Divide the total workload by the available time to calculate the implied utilization

Routing
Many small electronic devices such as PDAs and cell phones have changed our daily life over the past
years. A next step will be the embedding of their functionality and circuits directly into textiles. In this
paper we discuss for the first time, feasible methods and algorithms for establishing a routing structure
in textiles while utilizing standard printed wiring board (PWB) tools. Our approaches focus on a woven
textile with embedded copper wires, which guarantees usual wearing comfort, and circuits with few
chips running at few megahertz. We present differences between regular PWBs and textiles regarding
routing structure, space occupancy and electromagnetic compatibility (EMC) along with possible
manufacturing methods.

Key words: e-textiles, routing, textile packaging, System-on-Textile, wearable electronics

Introduction

Today's society increasingly relies on ubiquitous computing. In daily life, instantaneous access to any
kinds of information at any place is taken for granted. We are accompanied by many electronic devices
such as cell phones, PDAs, notebooks and MP3 players, which are more or less bulky and not really
wearable. Our vision behind wearable computing sketches future electronic systems to be an
unobtrusively embedded integral part of our everyday outfit. Some attempts such as the Wearable
Motherboard and the Wear- ARM already exist. Nevertheless, they mainly consist of rigid or flexible
printed circuit boards and hard boxes while their wearing comfort cannot compete with normal
clothing. Among other factors, they lack drapability, which guarantees the typical textile like feeling

63
(some textile terms are briefly explained in section 2.1.).

Our approach, however, utilizes conductive fabrics for signal transmission. In this manner, conventional
wires and entire circuit boards can be replaced by textile fabrics composing a System-on- Textile.
Inspired from PWB manufacturing, we call the technology for electronic integration in fabrics textile
packaging and the interconnection of electronic components on fabrics textile routing. Preceding to this
paper, systematic investigations of the electrical performance of conductive textiles were already
carried out by Cottet et al.

A drapable embedding of electronics in clothing would enable new applications, e.g. in the medical field.
The emerging field of medical prevention and rehabilitation necessitates continuous monitoring of
patient's health condition by having sensing devices close to the body. The large area of clothing allows
a distributed embedding of medical sensors and their preprocessing circuits. Additionally, clothing itself
could accomplish sensor functionality such as temperature and posture sensing. Wearable computing
and thus, textile-embedded electronics ideally satisfies
such requirements since clothing offers large areas, unobtrusiveness and body proximity. Other
applications could be fashion or could lie in the typical wearable computing field of context awareness
and social interruptability where the wearable computer assumes the role of a personal assistant.
There, sensors such as accelerometers, gyroscopes and microphones are embedded in clothing close to
body joints. Based on sensors data and statistical methods, the personal assistant identifies context of
the user and provides situation-dependent support.

Scheduling in Production and Operation Management

Scheduling can be defined as “prescribing of when and where each operation necessary to manufacture
the product is to be performed.” It is also defined as “establishing of times at which to begin and
complete each event or operation comprising a procedure”. The principle aim of scheduling is to plan
the sequence of work so that production can be systematically arranged towards the end of completion
of all products by due date.

Principles of Scheduling

The principle of optimum task size: Scheduling tends to achieve maximum efficiency when the
task sizes are small, and all tasks of same order of magnitude.
Principle of optimum production plan: The planning should be such that it imposes an equal load
on all plants.
Principle of optimum sequence: Scheduling tends to achieve the maximum efficiency when the
work is planned so that work hours are normally used in the same sequence.

64
Inputs to Scheduling
Performance standards: The information regarding the performance standards (standard
times for operations) helps to know the capacity in order to assign required machine hours
to the facility.
Units in which loading and scheduling is to be expressed.
Effective capacity of the work centre.
Demand pattern and extent of flexibility to be provided for rush orders.
Overlapping of operations.
Individual job schedules.

Scheduling Strategies

Scheduling strategies vary widely among firms and range from ‘no scheduling’ to very sophisticated
approaches. These strategies are grouped into four classes:

Detailed scheduling: Detailed scheduling for specific jobs that are arrived from customers is
impracticable in actual manufacturing situation. Changes in orders, equipment breakdown, and
unforeseen events deviate the plans.
Cumulative scheduling: Cumulative scheduling of total work load is useful especially for long
range planning of capacity needs. This may load the current period excessively and under load
future periods. It has some means to control the jobs.
Cumulative detailed: Cumulative detailed combination is both feasible and practical approach. If
master schedule has fixed and flexible portions.
Priority decision rules: Priority decision rules are scheduling guides that are used independently
and in conjunction with one of the above strategies, i.e., first come first serve. These are useful
in reducing Work-In-Process (WIP) inventory.

Types of Scheduling

Types of scheduling can be categorized as forward scheduling and backward scheduling.

Forward scheduling

Forward scheduling is commonly used in job shops where customers place their orders on
“needed as soon as possible” basis. Forward scheduling determines start and finish times of next priority
job by assigning it the earliest available time slot and from that time, determines when the job will be
finished in that work centre. Since the job and its components start as early as possible, they will
typically be completed before they are due at the subsequent work centers in the routing. The forward
method generates in the process inventory that are needed at subsequent work centers and higher
inventory cost. Forward scheduling is simple to use and it gets jobs done in shorter lead times,
compared to backward scheduling.

65
 Backward scheduling

Backward scheduling is often used in assembly type industries and commit in advance to specific
delivery dates. Backward scheduling determines the start and finish times for waiting jobs by assigning
them to the latest available time slot that will enable each job to be completed just when it is due, but
done before. By assigning jobs as late as possible, backward scheduling minimizes inventories since a job
is not completed until it must go directly to the next work centre on its routing. Forward and backward
scheduling methods are shown in the following figure.

Forward and backward scheduling

Objectives of Scheduling-

o Meeting customer and finished goods inventory delivery requirements.

o To achieve the required rate of output with a minimum of delay and disruption in
processing.
o To have maximum utilization of men, machine and materials by maintaining a smooth
flow of materials along the production line.
o To prevent unbalanced use of time among departments and work centres with a view to
eliminate idling of men and machines.
o To complete the production at minimum total cost and to reduce the manufacturing
cycle time to the minimum.
o To deliver products in time as per the delivery schedule committed to the customers.

66
Problems in Scheduling

Scheduling cannot be done perfectly due to the following problems:

Lack of correct and up to date information concerning lead time, production time, lot size.
Resources constraints, capacity shortages, delay in supply of materials, machine break downs
etc.
Absenteeism, lack of skill and experience in labor and labor inefficiency resulting in actual time
taken to complete a job exceeding the allowed time (i.e., standard time).
Type of production i.e., job, batch, process or continuous production.
Problems to balance the capacities of machines in the production line and also of work centers
in an assembly line.

Factors Affecting Scheduling-

Scheduling finalizes the planning phase of P.P.C. The following factors affect production scheduling and
are to be considered before finalizing the scheduling plan.

External Factors:

These are the factors which are not within the control of the organisation’s management. They are
dictated by the outside forces to which the management adjusts.

Such important factors are as follows:

 Customer’s demand-

This demand is estimated by the sales forecasting dep’t. Scheduling is based on the forecasts of the
expected sales of specific products in the continuous production. The forecast is made on the basis of
expected volume of business in case of intermittent production.

 Delivery dates of customer’s-

In a continuous or mass production with seasonal demand, the scheduling should be decided in such a
way that there is a balanced production throughout the year reducing the stock of inventories with a
constant level of production. In case of the intermittent production with the seasonal demand, it may be
adjusted by giving delivery on agreeable delivery dates to the consumer orders.

 Stock of goods already lying with dealers and retailers-

67
This situation arises in case of continuous production of standardized goods. Usually the dealers and
retailers are maintaining certain stock levels with them. The scheduling should be based on the stock
position with the retailers and dealers.

Internal Factors:

The factors within the control of management should be manipulated in such a way that objectives of
the production function can be achieved most efficiently and economically.

Some important such factors are as follows:

 Stock of Finished Products with the Enterprise-

Where the production is made to stock, the scheduling should be adjusted to the stock of finished
products with the dealers. The new sales forecast should be made and the scheduling should be done in
the light of the fluctuations in the stock holding.

 Time Interval to Process Finished Products from Raw Material-

This is the time required to process every sub assembly, and the finished product from the raw
materials.

 Availability of Machines and Equipment-

The various machines and equipment have varying production capacities. Moreover their occupancy
scheduling can be prepared with the help of machine load charts.

 Availability of Manpower

The scheduling should be done in the light of the availability of the manpower. The production rush
should be adjusted to overtime working or hiring of the temporary labor.

 Availability of Materials-

Sometimes stock out conditions interrupts the production flow. Proper stock levels should be
maintained to facilitate scheduling in continuous production. In case of probable stock out of strategic
goods, extra efforts should be made to procure them as far as possible and the limited stock in hand
should be issued only for critical operations.

 Manufacturing Facilities-

The manufacturing facilities in terms of power requirements, material handling services, store keeping
and such other facilities should be provided in accurate quantities so that it may not affect the smooth
production flow adversely and facilitate the scheduling function.

68
  Feasibility of Economic Production Runs-

Under the economic lot production, the two costs i.e. set up cost and the carrying cost are equated.

 Types of Manufacturing a Product-

This determines the proper scheduling procedure-

The difference is as follows:

Lot Manufacture:

In this case product is manufactured in lots or on job orders. It can be further divided as follows:

Manufacturing to Order-

Whenever orders go through the shops for separate parts, in single or multiple pieces, each part has to
pass through many processes. Assembly shall depend on all parts ready at same time. e.g., castings and
stampings (finished and unfinished) both requiring assembly.

Manufacturing to Stock-

This is different from the previous one principally in that very large number of pieces is involved, so it is
more convenient to produce large quantities and put them into stock to be used for assembly as
required. Parts are produced through separate lots at predetermined intervals over a period. In this case
assembly is an independent operation and can run as long as parts are available in stock.

Continuous/Mass Manufacture:

The case may be for single product, multiproduct or assembly product continuous manufacture. In single
product, it goes through a series of processes without assembly. Output is usually calculated in weeks or
months instead of by orders. The only change can be increase or decrease in output as demand
indicates.

In the multi- or assembly-product manufacture, parts rather more important parts are produced
continuously, each operation having a given output per-day, all being proportionately increased or
decreased as indicated by demand.

As far as scheduling is concerned this is equivalent to several streams of continuous manufacture sub
assembly, assembly and simultaneous final products increase or decrease with the output of the
parts/components.

69
Components of Scheduling:

Starting from the customer’s orders to delivery of finished products, the schedule cycle may be divided
into following steps. Every step shall require some time which may vary from order to order. These steps
will occur in the beginning in case of the standardized production processes, but may be modified
whenever there is a change in design, processing, procurement or sales volume.

Preliminaries to Manufacture-

(a) Credit Checking Period:

This is very little for well-established customers and well-known companies.

(b) Time for Preparing Production Order by Sales Deptt:

It consists of expressing and rewriting the orders into production orders with some identifying number,
shipping date and authorizing the manufacturing deptt to proceed with production.

(c) Time for Engineering Department:

The manufacturing department and the engineering department will concurrently receive a copy of
production order and if necessary will proceed with the design, drafting, specification and bill of
materials etc.

Time Consumed in Production Planning-

The production control department is to determine the shipping date by fitting the work into the current
plant manufacturing schedule. Too liberal or tight schedules should be avoided. Practically it is difficult
to predict the actual course of events, but good approximation will help in establishing various
allowances.

Time taken by planning department for processing and onward transmission of the order to the
production department is known as production planning time. By overlapping the activities of various
departments much time can be saved.

Procurement Cycle Time-

Procurement cycle time is the time consumed for receiving, inspection of various raw materials and
purchased components parts. The activities of ordering, raw materials or parts, their inspection and
deliveries may be simultaneous, only the largest time among these should be considered.

Time for Storage of Raw Materials-

The time between the receiving of the raw material and its delivery for production purposes is known as
raw material storage time.

70
Tooling Time-

The delivery dates may be delayed due to non-availability of tooling such as jigs, fixtures and other tools.
Thus these require planning well in advance by the methods engineering department. When the
procurement for materials or parts is started, the design and manufacture or purchase of materials
should also start. The availability of tools should be ascertained before they are put on the job.

Processing Cycle Time in Factory-

The factory processing requires planning and scheduling which should give the shortest cycle time
commensurate with existing load and most economic utilization of available equipment capacity.

Most of the processes are of over lapping nature as they are scheduled according to (i) the available and
open machine capacity (ii) time when materials can be obtained (iii) sequence in which parts are
required and (iv) coordination of sub assembly and assembly program.

The schedule will provide the net overall processing time beginning with the first part to the finish of
last. Thus the net factory time may be determined by subtracting the overlap time if any.

Time for Storage of Components/Parts-

This will be considered only if parts are manufactured in advance of schedule and must wait for their
turn for assembly or assembly in the store.

Transit Time-

The time consumed in moving the work between various departments. It must be taken into scheduling.

Sub-Assembly Time-

In most cases it over laps with factory processes.

Final Assembly, Testing and Shipping Time-

Final testing time of the assembly can be calculated by totaling the time taken by each unit of
product in testing. Most of the times, units are inspected in groups. The net time from
beginning to finish is the time to be included in the schedule. In case of packing and shipping
one unit, the time consumed for this purpose should be taken into consideration.

Scheduling Procedure:

Scheduling normally starts with the master schedule typical form of which i.e. the master schedule of a
milling machine is shown following figure as described in the example.

71
A master schedule resembles control office which completes information regarding all the orders in
hand. Master schedule is a weekly breakdown of the production requirements. The total capacity in any
week can be calculated.

As the orders are received, depending upon their delivery dates they are recorded on the master
schedule. When the shop capacity is full for the concerned week newly acquired orders are carried to
next week and so on. So a master schedule is continuously updated, it tells the running total of master
schedule is basis for further scheduling techniques.

Scheduling Procedure for Different Types of Production:

The scheduling procedure varies from plant to plant and with type of production.

The following are different cases:

For Intermittent Production: It involves the following-

(a) Scheduling within the Order:

Relative dates at which each process on each component or lot shall be started or finished is essential to
be determined so as to fit it in other orders.

(b) Scheduling of Order in Relation to Other Orders:

In stock manufacturing this will depend upon the relative dates at which each component should be
completed for stock, whereas in case of customer production. This will depend upon delivery date of
order. Sequence of order to be assigned to each machine can be determined.

(c) Scheduling to Machine:

With the required completion date for an order, reference to a schedule of relative processing dates will
show when each process should be initiated. Reference to machine load records will provide the nearest
available date for starting. When all processes on all parts or lots have been assigned to machines,
scheduling is complete.

In custom order production, in the absence of rush orders, scheduling is very easy. In situations like this,
company must have at hand the exact load data to make detailed, accurate schedule for keeping a tight
production control to meet the delivery commitments. In production to stock, manufacturing is done for
stock and control problems are simple.

Gantt chart is normally used to give the detailed picture of the load and schedule of departments or
plants.

72
For Continuous Production-

In this case scheduling is a simple problem but to coordinate production with sales, inventory levels,
purchasing, engineering and financial operations, the careful planning is essential.

In case of single product continuous production, variation in the production can be achieved very easily.
In case of assembly product continuous production, scheduling problem increases. In practice owing to
the limitation of equipment manpower and materials, it is difficult to achieve completion of all parts
when required. This may be due to breakdowns, excessive rejection and inaccuracy of estimates.

Example:

Prepare the master schedule for working on a milling machine for a month. From the past data it is
known that the machine works 20 hrs a day. So max number of M/C – hrs per week = 20 x 6 = 120

Now the scheduling is to be done in such a way that the maximum number of M/c – hrs should not
exceed 120 per week and should be below minimum number of M/c – hrs (say 6 machine – hours)

Master Schedule:

For a Milling Machine.

Max. Productions =120 hrs.

Min. Production = 6 hrs. (say)

From this chart it is evident that the M/c is engaged in first week for 100 hrs, in second week for 85 hrs,
in third week for 40 hrs and in the fourth week there is no load on the m/c. Now there is a fourth job on
this m/c.

If this new job takes less than 20 hrs in processing on that m/c then it can be directly loaded either in
first week or in second week or in 3rd or 4th. If the completion time is more than 20 hours then the job
has to be loaded in different weeks or where there is no load.

73
The Objectives of Master Schedule:

It provides a means of keeping a running total of the manufacturing requirements.

It facilitates the production manager to plan in advance for any shifting necessity from one
product to another or for a possible overall increase or decrease in manufacturing
requirements.
It provides the required data for calculating the back log of workload ahead of each machine.
With the help of master schedules the customer can be supplied with probable or sometimes
certain definite date of delivery after his order has been placed on the master schedule

Advantages:

Very simple and easy to understand

It provides overall picture and current production schedule
Can be easily maintained by non-technical staff
Making and maintenance of this chart is cheap
In view of rush of orders certain percentage of total capacity can be reallocated.

Disadvantages:

Provides only overall picture and detailed operations are not indicated.
It does not provide detailed information, so this system is applicable for smaller plants.

Analytical tools

To defining a problem accurately, root cause analysis is one of the most important elements of problem-
solving in quality management. That’s because if you’re not aiming at the right target, you’ll never be
able to eliminate the real problem that’s hurting quality.

So which type of root cause analysis tool is the best one to use? Manufacturers have a range of methods
at their fingertips, each of which is appropriate for different situations. Below we discuss five common
root cause analysis tools, including:

1. Pareto Chart
2. The 5 Whys
3. Fishbone Diagram
4. Scatter Diagram
5. Failure Mode and Effects Analysis (FMEA)

74
Pareto Chart

A Pareto chart is a histogram or bar chart combined with a line graph that groups the frequency or cost
of different problems to show their relative significance. The bars show frequency in descending order,
while the line shows cumulative percentage or total as you move from left to right.

The Pareto chart example above is a report from layered process audit software that groups together
the top seven categories of failed audit questions for a given facility. Layered process audits (LPAs) allow
you to check high-risk processes daily to verify conformance to standards. LPAs identify process
variations that cause defects, making Pareto charts a powerful reporting tool for analyzing LPA findings.

Pareto charts are one of the seven basic tools of quality described by quality pioneer Joseph Juran.
Pareto charts are based on Pareto’s law, also called the 80/20 rule, which says that 20% of inputs drive
80% of results.

5 Whys

The 5 Whys is a method that uses a series of questions to drill down into successive layers of a problem.
The basic idea is that each time you ask why, the answer becomes the basis of the next why. It’s a simple
tool useful for problems where you don’t need advanced statistics, so you don’t necessarily want to use
it for complex problems.

One application of this technique is to more deeply analyze the results of a Pareto analysis. Here’s an
example of how to use the 5 Whys:

Problem: Final assembly time exceeds target

75
  Why is downtime in final assembly higher than our goal? According to the Pareto chart, the
biggest factor is operators needing to constantly adjust Machine A
 Why do operators need to constantly adjust Machine A? Because it keeps having alignment
problems
 Why does Machine A keep having alignment problems? Because the seals are worn
 Why are Machine A’s seals worn? Because they aren’t being replaced as part of our preventive
maintenance program
 Why aren’t they being replaced as part of our preventive maintenance program? Because seal
replacement wasn’t captured in the needs assessment

Of course, it may take asking why more than five times to solve the problem—the point is to peel away
surface-level issues to get to the root cause.

Fishbone Diagram

A fishbone diagram sorts possible causes into various categories that branch off from the original
problem. Also called a cause-and-effect or Ishakawa diagram, a fishbone diagram may have multiple
sub-causes branching off of each identified category.

76
Scatter Plot Diagram

A scatter plot or scatter diagram uses pairs of data points to help uncover relationships between
variables. A scatter plot is a quantitative method for determining whether two variables are correlated,
such as testing potential causes identified in your fishbone diagram.

Making a scatter diagram is as simple as plotting your independent variable (or suspected cause) on the
x-axis, and your dependent variable (the effect) on the y-axis. If the pattern shows a clear line or curve,
you know the variables are correlated and you can proceed to regression or correlation analysis.

Failure Mode and Effects Analysis (FMEA)

Failure mode and effects analysis (FMEA) is a method used during product or process design to explore
potential defects or failures. An FMEA chart outlines:

Potential failures, consequences and causes

Current controls to prevent each type of failure

Severity (S), occurrence (O) and detection (D) ratings that allow you to calculate a risk priority number
(RPN) for determining further action

When applied to process analysis, this method is called process failure mode and effects analysis
(PFMEA). Many manufacturers use PFMEA findings to inform questions for process audits, using this
problem-solving tool to reduce risk at the source.

77
Problem analysis tools for apparel industry-
ISHIKAWA is also known as fish bone analysis. It is also known FISHIKAWA/ FISH BONE/ HERRING Bone
cause and effect diagram. This method has been invented by “KAORU ISHIKAWA” In 1968 which should
the specific event.

This method or diagram has been in use since then specially product design, development and
manufacturing sector. This diagram focuses on each and every cause or reason for imperfection in the
work and helps to eliminate the problems that will occurs.

This system includes several elements based on which the system works. Such
as-

People (anyone involve with the process )

Method ( how the process is performed and the specific requirement for doing it. Such as-
procedure, policies, rules and regulation, law etc )
Machineries (any computer, equipment, tools etc required to perform the job )
Material (raw material, stationeries etc )
Measurement (data generated from the process that are used to evaluate its quality )
Environment (the conditions such as- location, time, temperature and culture in which the
process operates )

78
Production problems find out

People Method Measurement

 Child labor Time basis Late present

 Demotivated Station to station distance Low intensive
 Lazy
 Illiterate

 Old machine Petrol using Unhealthy workplace

 Manual m/c Utility Toilet problem
 Parts problems

Machine Material Environment

For a manufacturing industry Ishikawa/Herring bone generally works in 5M’S

rules. These are:-

1. Man (physical work, brain work)

2. Machine (Technology)
3. Method (Process)
4. Material (Raw material and information)
5. Measurement ( Inspection)

Note: In some manufacturing industries 5M is replaced with 8M’S. Such as-

6. Mother nature (Environment)

7. Money (Capital and Management)
8. Maintenance.

8P’S used in marketing industry while protecting Ishikawa.

Product (Goods, Service, Materials)

Price
Place
Promotion

79
 People
Process
Physical evidence
Packing

5S used in service industry.

Surroundings
Suppliers (Service provider)
System ( Method, Working procedure, Process)
Standard documentation skill
Scope of work

Root cost analysis

Direction of applying root cost analysis-

Agree on the problem statement. (This is written on the mouth of the fish, be as clear and
specific as you can about the problem. Be aware of defending the problem a terms of solution)
Agree on the major categories of causes of the problem ( Written as brunches of the backbone
or rib of the fish or bone of the fish. Here 8P’S, 8M’S and 5’S will be the major categories)
Brainstorm all the possible causes of the problem. (Ask all the possible causes with W.H
question regarding the problem. The answer will be written as per category).
Ask again and again “why does this happen?” about each cause. (Also write down the sub causes
of the problem).
Continue to ask why and general deeper level of causes.

These will you to identity and then address root cause to prevent future problem.

Tips for applying root cause analysis-

Use the fishbone diagram tool to keep the team focused on the causes of the problems
symptoms.
Consider drawing a fish on a flip chart or large dry erase board.
Make sure to leave enough space among the major categories of the diagram so that you can
act minor detailed cause’s letter.
When you are brainstorming causes consider having team members write each cause on sticky
notes, going around the group asking for each person for one cause. Continue going through the
round, getting more causes until or ideas or extracted.
Encourage each person to participate in brainstorming activities and to voice their own opinion.

80
 Note the 5 why’s technique for better diagram making .( keep asking why until you get the root
causes).
Use multi voting technique t identify or choose root cause from all the idea gene raised

Different types of problem solving tools applied in apparel industry

A3
Barrier analysis
8 discipline problem solving
Factor analysis
Failure mood and effect analysis.
Fault tree analysis.
Forensic engineering analysis.
Multiple regression analysis.
Multi variety linear regression analysis.
Orthogonal defect classification analysis
RCASEX (Root cause analysis solver engine).
Creative problem solving tools.
Collective intelligence analysis.
Divergent thinking.
Grey problem analysis.
Innovative analysis.
Instrumental analysis.
Problem statement analysis.
Problem structuring method analysis.
Sub goal leveling analysis.
Travel shooting analysis.
Wicked problem solving analysis.
Cause and effect analysis.
Ishikawa / Herring bone / Fishikawa

Divergent thinking

Divergent thinking is a thought processing or method use to generate creative ideas by exploring many
possible solutions. It is also known as cognitive thinking.

It follows a particular set of logical step to arrive advance solution, which in some cases isn’t correct
solution.

81
Barrier Analysis

Barrier analysis is a ratite assessment tool use in behavior change program .The purpose of barrier
analysis is to identify behavioral determinates. So that more effective behavior changes, Communication
massage, Strategies and Supporting activities can be developed.

Barrier analyses is most commonly use in following sector-

1. Self efficiency
2. Social Norn’s
3. Positive consequence
4. Negative consequence

A3 problem solving

The name A3 problem solving deride from the paper name on which the problem is solved

82