Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

6.1.2 Characteristic Features for Simple and Effective Planning & Control Techniques of Repetitive Manufacturing

Intended learning outcomes: Produce an overview on how the lean / just-in-time concept tends towards more simple techniques in place of more complicated techniques of materials and capacity management.

Figure pointed out the reasons for simple or rather complicated techniques in materials management. Simple planning & control techniques require, as shown in the figure, low-cost items or at least continuous frequency of customer demand. In the case of dependent demand for expensive components, more continuous demand can be achieved through, for example, reducing lot sizes but also through a product concept with fewer variants or even standard components. More simple techniques can then be implemented in place of more complicated techniques of materials management. To do this, some important methods were developed within the JIT concept that reduce “mura.” They lead to production or procurement with frequent order repetition — that is, to repetitive manufacturing.

The repetition of the same processes creates a potential for automation in administration. Continuous frequency of customer demand allows production or procurement with order release according to consumption, or a simple (stock) replenishment.

Figure pointed out the reasons for a “good” situation or a situation that should be avoided whenever possible in materials management. Following that figure, the situation becomes “better” the further upward that the order penetration point (OPP) can be set, that is, the more there is deterministic demand. As the assumption must be that the customer tolerance time does not lengthen, the cumulative lead time must be reduced. Some of the best-known JIT/Lean methods to reduce “muri,” “mura,” and “muda” are precisely those that increase the potential for short lead times.

Figure pointed out the reasons for simple or rather complicated techniques in capacity management. As the Figure shows, simple planning & control techniques require flexible capacity. Accordingly, the JIT concept contains important methods and guiding principles to reduce “muri,” in order to achieve flexible capacity and thereby, in turn, reduce “mura” and finally “muda.”

Course section 6.1: Subsections and their intended learning outcomes