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Improving manufacturing flexibility: the enduring value of JIT and TQM.

Article Excerpt
Just-in-time and total quality management may be approaching the ripe old age of 30, but a study of 325 manufacturing plants in six countries finds they still provide the best route to overall flexibility. As global competition intensifies, sellers must meet increasing demands for quality, customization, and lower lead times. Pressures on the bottom line require inventory reductions along the supply chain. Since most companies must ration their capital investments, managers may do well to reexamine these tried-and-true manufacturing techniques before investing scarce dollars.

Introduction

In today's competitive environment, markets are becoming more international, dynamic, and customer-driven. Customers are demanding more variety, and better quality and service, including both reliability and faster delivery. Technological developments are occurring at a faster pace, resulting in new product innovations and improvements in manufacturing processes. The resulting competitive environment requires low-cost and high-quality products in increasing varieties. These changes have instigated improvements in business and manufacturing strategies.

The three main strategic imperatives that emerged in the past century are low cost, high quality, and improved responsiveness (both delivery time and flexibility of product delivery) (Davis et al., 2003). Cost efficiency was the driving force behind Henry Ford's mass production paradigm, with large production volumes providing low per-unit cost. Through the efforts of W. Edwards Deming and Joseph M. Juran in Japan, quality became the next strategic imperative. The marketplace valued efficiency and low prices, but began to emphasize the quality of products and services in product purchasing decisions. As a result of increased global competition in the 1970s, responsiveness emerged as the third strategic imperative. Buyers became more sophisticated, demanding more customization and shorter product life cycles. Manufacturers found they could no longer maintain the large production volumes and the cost efficiency of their production processes with these higher levels of change and uncertainty. Just-in-time concepts were introduced as a way to reduce inventory and decreasing cycle times.

The history of just-in-time (JIT) can be traced to the Toyota Production System developed by then vice president, Taiichi Ohno (Monden, 1983). The rigors of international competition along with a lack of capital resources, forced Toyota to rely on decision-making skills and problem-solving skills of their employees to eliminate waste and improve productivity. The result was an emphasis on producing product 'just-in-time' and focusing on the human aspect of productivity improvements (Sugimori et al., 1977). Just-in-time has evolved from a specific practice to be implemented on the factory floor to a philosophy of management that is aimed at the elimination of waste and continuous improvement (Lummus and Vokurka, 1999). It had come to be viewed as not just technique per se, but a way of doing business (Vokurka and Davis, 1996). Just-in-time is closely correlated with total quality management (TQM), with the ultimate goal of meeting or exceeding customer requirements. Key to the success of just-in-time was the internal synchronization and integration of operations and improved relationships with suppliers.

These quality and just-in-time initiatives improve cycle times and begin to solve the trade-offs between efficiency and flexibility. Firms strive to focus on producing in quantities as low as one and expanding their improvement initiatives beyond their firm to the entire supply chain (Vokurka and Lummus, 2000). Chase et al. (2005) summarized the environment succinctly: "Recent trends such as outsourcing and mass customization are forcing companies to find flexible ways to meet customer demand. The focus is on optimizing core activities to maximize the speed of response to changes in customer expectations."

If flexibility is important to firms today, they must understand what initiatives will improve it. Are just-in-time concepts still valuable or should they focus on other improvement initiatives? This paper uses a survey of global manufacturing firms to investigate their success with improving manufacturing flexibility. The paper begins with a review of the manufacturing flexibility literature. From there, hypotheses are specified that require testing through practical applications. Hypotheses are tested using data from 325 manufacturing plants in seven countries. Practical applications and guidelines for managers are provided.

Manufacturing Flexibility

Three articles have provided a fairly comprehensive review of the manufacturing flexibility literature...

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