CASE ASSIGNMENT

CASE BRIEF
Thermocouples were used to measure temperature – when two dissimilar metals are joined
at the ends and heat is applied, a current is generated which can be used to make accurate
temperature measurements using a gauge. General Electric’s Aerospace Instruments and
Electrical Systems Department is a department that produce Thermocouple required by
commercial and military aviation. Thermocouple product is ranked second among five
products of the department. The product had 30 majors’ types and 90 different models. In
line with sales growth, the inventory level had been increased in the last 5 years, from $2.7
million in 1977 into $6.2 million in 1981.The simples of these, the J-79 product line, was
regarded as a likely candidate for any experiment with JIT techniques. It’s manufacturing
managing, Bill Draper, had joined GE’s Impact program last year and learned that Just-In-
Time system has successfully implemented in Japanese companies to manage inventory. He
asked the team to implement JIT system to manage the inventory and expect the bring
down inventory level from $6.2 million to $2.1 million in three years and further $1.4 million
reduction after five years.

PROBLEM IDENTIFICATION
Work force issue
 Workers had autonomy in choosing which parts to make; this led to excess supplies
of one & shortages of other parts
 The rate for reworking defective parts was higher, so the welders benefitted from
building in their own defects
 No continuous supervision of the workers.

Order entry, purchasing and production control:

 A distribution warehousing operation served as the interface between the customers

& aerospace instruments and electrical systems department
 They dealt with both military & commercial customers; Commercial customers
accounted for 50% of sales
 Commercial customers expect goods to be delivered on the due date
 Military customers accepted goods any time up to due date, which helped in
flexibility in scheduling
 Manufacturing was done after receiving orders and also on forecasts
 Production was planned on monthly basis, but it led to more work in progress
inventory.
Inventory Management:

 Inventory control package (ICP), a variant of MRP was used for determining the raw
materials need. However, the system was not fully integrated along with operations
 Material control was loose and there was no accounting after the products left the
stockroom
 Production floor inventory accounts for 80-85% of the total inventory on hand for
the production line.
 Material losses totalled 6.3% of sales.

IMPLICATION OF JUST IN TIME PROCESS

1. JIT will make the workers more versatile, JIT cannot be implemented without the
help of the workers, and it is the responsibility of the management to take the
workers into belief. Also, JIT is a continuous process, it is based on a long-term
relationship so the relationship with workers is also essential.
2. JIT can be implemented with the collaboration of vendors, long-term relationships
are to be developed with vendors for improving quality, they should be explained
the concept & advantages of JIT
3. The vendors need to be taken into confidence; they should be shown the advantages
of JIT. JIT should be implemented inhouse first. Also, we can multiply sources for the
same parts so that the volatility can be shared.
4. Idle process, steps are to be removed to make the process more efficient, in this way
we can remove the in-process inventory & effectively implement JIT
5. Management commitment is a prerequisite for any organizational change. JIT will
expose the manufacturing problems; managers must allocate the resources to solve
these problems. Also, JIT brings organizational changes, which are to be supported
by managers for sustainment.

RECCOMENDATIONS

 Process Improvement
Increase familiarity with the process, highlighting areas where materials movement could be
smoothed and non-productive time eliminated, Rationalize the shop layout to reorganize
thermocouple area, sequencing machine, Removal of unused machinery and purchasing
required tools.

 Setup Reduction
The JIT can help in elimination by introducing additional equipment’s and significantly
reduced trough redesigning.
  Levelling the Schedule
A level build schedule was regarded as critical to smoothing the flow of production and
moving toward more sophisticated JIT techniques.

 Overcoming Work Force and Management Resistance

This will be achieved through improved communications:
1.Asking questions to the workers regarding the problems they faced
2.System of requiring permission prior to utilisation of higher rate of welders
Constant policing of foremen
3.The workers felt that JIT would lead to a cut in pay, and they didn’t like the idea of
increased supervision, but them in regular decision making will help in getting
morale high.