Studied by :Adil Aziz ID # 2938Sheema Raza ID # 2936

IQRA UNIVERSITY – GULSHAN CAMPUS

Advance Research Method Report

Just- In- Time Inventory Management in Automotive Industry in Pakistan

Presented to : Dr. Khalid Jamil

Title:

Concept and implementation of ‘’ Just-in-time inventory ‘’ in automotive industry in the perception of customer satisfaction in Pakistan.

Introduction:

Today world perception is changed from past, in the past whatever companies are producing buyers are compel to purchase that, if the buyers wants any changes in it , companies were not entertaining buyers in this regards. Today… companies are focuses on the customer perceptions and want to satisfy them in their percept values. These values can be vary entity to entity or region to region … and can be evaluate in means of quality, durability, timely delivery and customized product which satisfied the customer’s needs. But when we are talking about customer satisfaction… it emerges a horizon, which can be anything require by customer and we have to provide as per required time. So thing is that to look critically on each aspect of customer satisfaction criteria’s and tried to serve in best possible manner in order to retain the customer.The Just-in-Time inventory system is not covering those entire customer aspects but providing a very valuable way out of to get rid with all these problems.

Just-In-Time inventory system is “ the material, at the right time, at the right place, and in the right quantity. ”

The companies who wants to have a JIT system is doesn’t means that everything will be done in rush. JIT concept provides a very organized way to the organization to manage their resources and allocated healthy way from the hierarchy of employees to all work flow material, machine, all processes till final completion of product. But we should keep the one thing in our minds that Synergy is the only thing that can improve business results which refer the JIT concept is just one relation in the entire series!

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Statement of the Problem:

In Pakistan, automotive industry is one of the major shareholders in growth revenue indicator. But currently accordingly to our observation heavy duty automobile sector (Buses and Truck assemblers and manufactures like Hinopak, Nissan, Ghandhara industries and many others) facing many problems in supplies which causes to delay in deliveries. The eventually result is affect to customer adversely. It’s understood that when customer is paying for his desire product and not getting the product as per his desire, definitely customer will be moved for the next option!It is a not a new but a very common problem in each local automobile industry to shortage of supply with parts suppliers.

The Purpose of the Study:

The purpose of this study to optimize the inventory, supply demand relationship in order to achieve the customer’s satisfaction and enhance the productivity growth of the automotive manufacturing organization. By thorough study to learn the strategies of auto motive’s leaders.

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Production Consumption

Buffer

Demand

Just-in-time inventory concept _ figure

Literature Review:

Just-In-Time is manufacturing philosophy which integrates with time, labor, material, proper allocation, reduced cost, quality improvement, productivity and efficiency with technology. The main idea is that companies only focus on what the customer demand on the basis of firm orders rather than forecasting. Companies have to utilize their resource in best possible manner. JIT History & Importance _ Nevertheless JIT is not a new thing. The phrase JIT is used by Henry Ford C.E.O of Ford Motors Company in 1920s very first. Further more the technique with some advancement in this published by Toyota Motors Corporation by implementing as “Toyota Production System” (TPS) in 1954 and attaining the drastic result by using this technique which leads to maximum profit and great return in investment with lower the inventory level and having the privileged of customer satisfaction. The most important aspects of JIT are Reduced set up times in warehouse, improved flows of goods in/through/out warehouse, Employees who have multi-skills are utilized more efficiently, Better consistency of scheduling and stability of employee work hours, enhanced emphasis on supplier relationships, Supplies persist around the clock keeping workers productive and businesses focused on turnover, and without any doubt with better quality products, higher productivity and lower production costs.Reduction in Inventoy & Productivity Growth _ it is Value-added equals the firm's sales during the fiscal year, minus the costs of purchased materials and services. It is observed that in Japan companies gain in their sales almost 50% by just cutting down their Work –In-Process Inventory during a period of from the late 1960s to the early 1980s and on average, each 10% reduction in inventory led to about a 1% gain in labor productivity, with a lag of about one year. 1

1. Marvin B. Lieberman & Lieven Demeester ; Inventory Reduction & Productivity Growth: Linkage in the Japanese Automotive industry

They worked out on 52 automotive industries in Japna in which Eight were direct assembler of core and three were contract assembler and rest of the 41 industries were the parts supplier directly to them. All industries were interlink through ERP system and precisely look on stock and replenishment.Another thought is carried out through study that good qaulity is drive on the basis of lower inventory and it is only a poor intution that qaultity will improved through keeping the stock. It is only causes to defective production.

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The Methodology:

The method of this study will be based on interviews with the direct stake holders of automobile industries and their experiences. We will try to get their actual problems which they are facing in maintaining the inventory and why they are keeping the bulk stock which holds a huge investment? What are minimum and maximum stock levels? We will arrange an in-depth interview which will base on sample size of 5 ~ 6 persons. After taking their views we will do a survey based on a questionnaire, having the questions about implementation of Just-in-time inventory.After that survey we will concise all problems and try to give the solution in form of implementation of Just-in-time inventory to avoid their existing scenario of stress management and risk management and rushing towards to get accomplished the given task.

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References:

1. Mladen Radisic ; Just-In-Time inventory concept2. Marvin B. Lieberman & Lieven Demeester ; Inventory Reduction & Productivity Growth: Linkage in the

Japanese Automotive industry. 3. Michael Alles, Amin Amershi , Srikant Datar, Ratna Sarkar ; Information and Incentive Effects of Inventory

in JIT Production4. http://www.wikipedia.org : Wikipedia, the free encyclopedia5. http://www.1000ventures.com/business_guide/im_jit_main.html : Information about Just-In-Time systems

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