Operations Management

Case Assignment Ford Motor Company Plastics Division: JIT Principles

Case Overview
The context of the case is the manufacturing of tail lamps at Ford Motor Companys plastics division. The company is attempting to move towards JIT production system and this case analysis intends to analyze this attempt. The following the process flow of the tail lamp manufacturing:
Bodies

Press Molding

Painting

Final Assembly

Store in metal basket and ship

Lenses, Clips, Studs, Butyl and gaskets

Each of these three processes consist of further sub processes for example molding is a 4 step process while painting is a two stage process and the Cargill final assembly combines 8 operations.

Just-In-Time Principles at Ford Motor Company Plastics Division

Just-in-time philosophy stands on four cornerstones namely product design, process design, human and organizational elements and finally manufacturing planning and control. Each of these cornerstones comprise of various principles which enable JIT implementation. Following is an analysis of the various JIT principles incorporated and the rest which are not implemented at the Fords plastic division:

1. JIT principles incorporated

The plant scheduler at Fords plant has incorporated the following principles: Reduced the lot sizes and having shorter production runs. (This is the shift on which the shift supervisor had expressed concern and didnt want t o follow) Frequent set up change to have a uniform and level production approach. A flexible assembly set up for the final operation of this process which is capable of performing multiple operations for different models of tail lamps. Production scheduling for every 4 weeks and changing the plans only after completion of the scheduled period of 4 weeks, Inspection i.e quality management early in the final assembly operation at station no. 4 rather than waiting for the end product. Looking at the principles already incorporated, one can make out that the company has mostly concentrated on the last cornerstone i.e the manufacturing planning and control and ignored the rest of the three which has led to a failed overall implementation.

2. JIT principles not incorporated

As mentioned earlier, the company has not incorporated the major principles under the first three cornerstones. These are as follows:
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Product Design Product design is not standard, has a lot of variety and no effort has been undertaken to adapt the product design to the JIT techniques Setup times are very high in all molding and assembly operations (ranging from 20 minutes to over two hours). Due to this high setup time, the mixed model production is becoming difficult and is opposed by the workers. There is no focused plant for tail lamps to reduce the movement of material and workers instead the molding department is shared with other operations which leads to scheduling and setup change problems. Line stopping environment and kanban is not in place. Human element is the base of JIT where each worker on the floor needs to be capable and empowered to make changes on the production floor in terms of continuous improvement but this is not seen here due to which the workers are complaining against the frequent change of setup desired. The case is silent on the concept of cross training and flexible work but it is expected that it is not implemented Absence of team work due to opposition from workers Continuous improvement not followed Inventory was used as a means to hide problems (See picture) Pull System not in place
Source: http://www.slideshare.net/amarsh elke/jit-principles

Process Design

Human and organizational elements

Manufacturing planning & control

Besides this, the excess capacity in painting is also a source of waste which doesnt adhere to the JIT approach.

3. Evaluation of planning schedule

Exhibit 2 of case data provides the weekly demand schedule for all months used by the production department and the weekly demand actually faced by the company. Appendix 1 shows the comparison between this schedule and the demand and analysis the months where the department is not able to meet the demand from the production and the inventory volume combined. Appendix 1 presents a sample analysis for one model ie Escort and finds out that for most of the months (where there is a negative inventory number), the production schedule in exhibit 2 doesnt meet the actual weekly demand. A similar analysis can be carried out for other models. To find out the cause behind this phenomenon, a capacity analysis was carried out and it was found that the molding operation is a bottleneck. This can be seen in Appendix 2 as well where the capacity requirement for the given weekly demand (without even considering the setup times initially) is way above the
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available capacity. Moreover this analysis was done with mean weekly demand, the situation would be worse if the same is done for the maximum weekly demand.

4. Cost Saving Opportunities

The potential cost savings in a JIT system would come from: Removal of excess capacity (in painting department) Removal of inventory of both raw material and finished goods (20% carrying costs due to storage, potential damage and opportunity cost) Reduction in setup and cycle time (through increased productivity) Cross training and flexibility Relationship with suppliers and implementing a pull system 5. Recommendation to Bob Dresser While Bob dresser tried to implement the JIT at the production floor of tail lamps, he experienced opposition from the shift supervisor which in turn was due to the workers disagreeing to this approach. It is well established that the human element is core to the successful implementation of JIT. Hence my first recommendation to Bob dresser would be: To train and educate the workers with the principles of JIT rather than just imposing uniform production level on them. Only when they understand it deeply, would they be in a position to contribute in the process of continuous improvement. This will enable the workers to find ways to reduce the setup time which is acting as a hindrance for the JIT implementation. Another consideration would be around the painting department: Since only tail lamps require a painting operation and there is excess capacity in this department which acts like a waste in JIT, Bob should restructure the department and remove the excess capacity (may be by working with part time workers or reducing the worker and the equipment count). Appendix 2 and 3 testify the fact that molding operation is a bottleneck (as final assembly is shown to have sufficient capacity in appendix 3 and painting is already said to have excess capacity). Thus another recommendation would be to: Add capacity for molding operation and do away with the dedication of molding machines to particular models. This dedication is a way to hide the problem of high setup times. Thus there should be higher flexibility and lower setup times. Also a lot of machines in molding department are scheduled for maintenance; hence the role of quality management is important at this point as they are acting like a waste currently. There are some further suggestions on the product and process design as well but the set of first recommendations to Bob would be the ones listed above and the detailed discussion is listed in the next part.

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6. JIT approach in the given environment In the given scenario, the JIT principles are not applicable directly in the current way. This is because JIT is a philosophy which cannot work without its four cornerstones. Hence to implement JIT successfully, not only Bob but the company would have to take certain steps which are as follows: Try to work on the product design, by making the tail lamps of different models more standardized (subject to feasibility) and making it more modular and increase its manufacturability. For the process, it would be better to implement a focused plant i.e group machines by products and not by functions. Hence the company should set up a separate area within their plant where all the operations related to the tail lamp manufacturing can be performed. In this way the deficit capacity problem of molding and the surplus capacity problem of painting can be solved. Besides, it would also save the time of movement. Setup times are also too high as already pointed out, hence they should reduce the setup time with the help of knowhow of the workers and may be SMED principles to reduce internal setup time. Continuing the leveled production scheme for a period of 4 weeks and shipping exactly same volumes of a model throughout that period. o In order to be able to implement uniform/level scheduling it is desirable to have a relatively stable demand. Although one cant comment on the stability of the given demand in absolute terms. But it is expected that the company makes some attempts to smoothen the demand curve. Worker training and flexibity(already explained in previous part) Hopefully, with the approach lined up as above the company has brighter chances of having a successful JIT implementation and drive the benefits related to it.

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Appendix 1: Weekly demand schedule evaluation

January February March April May June July August September October November December

Schedule 6976 6008 5612 6454 6338 5361 6574 5820 5708 6104 6372 6131

Escort Demand Inventory Remarks 6393 2333 Excess Inventory 6263 1313 Excess Inventory 6509 -3174 6513 -237 6667 -1646 6551 -4759 6664 6216 6503 -9234 6579 -3482 6563 -2295 6557 -741 6637 -2023

Appendix 2: Molding operation capacity analysis

Machine Type 700 Ton 700 Ton 700 Ton 700 Ton 700 Ton 700 Ton 700 Ton 1000 Ton 1000 Ton Average Max. Machine hrs Parts for Mold Cycle time weekly weekly required per mold (sec) demand demand week 2 54 6538 6934 98 2 54 1364 1478 20 2 54 1017 1102 15 2 54 7186 7612 108 1 69 3459 3885 66 1 69 3459 3885 66 2 54 2686 3019 40 2 90 2542 3234 64 2 90 2542 3234 64 2 90 630 925 16 2 90 630 925 16 414 176.0445 (6.177*3*19*5*0.1)

Model Escort Lynx Escort-GT Tempo Thunderbird Couger Mustang Mustang-GT

Req. Mold 540 539 539 583 642 643 639 396 397 396 397

Total machine hours required per week(for 700Ton) = Total weekly machine hours available for 700 Ton m/c

Therefore, with the given 19 molding machines and 10% capacity available for tail lamps, molding operation is a bottleneck.

Demand not met

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Appendix 3: Capacity Analysis of Cargill assembly system

Part Name Cycles/Hrs. Escort 450 Escort-GT 450 Lynx 450 Thunderbird 442 Couger 450 Tempo 442 Sable 353 Mustang 442 Mustang-GT 442

Cycle time Weekly Demand (in Secs) (avg.) 8 6538 8 1364 8 1017 8 7186 8 3122 8 3459 10 2686 8 5084 8 1259

Daily Time required demand (mins) 1308 174 273 36 203 27 1437 195 624 83 692 94 537 91 1017 138 252 34 14.56 hrs 18.06 hrs 25 (6.177*2*2) hrs

Total daily assembly time required (excluding setup times) Total daily assembly time required (incl. max. setup times) Total daily assembly time available in the new assembly

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