2 management - School of International Business and ...

419 Production in the Global Environment – Analysis and Best Practices
dimensions of production control: quantities and timing. MRP works with finished products and
their constituent parts. The relationship between them is described in the BOM. The basic inputs
to MRP are the forecast of demand, the associated Bill of Materials, and the current inventory
status. The output is the Planned Order Release POR: part number, units and due date. While in
the 1970s and 1980s American manufacturers were focusing on MRP, Japan focused on Just In
Time (TaiichiOhno,Toyota, 1986)., which means ‘Stockless Production and Zero Inventories’. The
quality principles from JIT are:
– Process control
– Easy to see quality
– Insistance on compliance
– Line stop
– Correcting one‘s errors
– The 100% check
– Continuous improvement
In 1990 JIT was repackaged into Lean Manufacturing and used mainly in the Western World (Wom-
ack, Jones, Roos 1990) [3] from then on. In 1992 TQM was introduced and implemented as a Qual-
ity Management standard using ISO9000 as a base.Six Sigma was introduced first by Motorola in
1985-87, as a technical requirement for HiTech manufacturing (6 Sigma = 3.4 ppm defects). Later it
was picked up by GE and others to reduce the variance of business processes down to Six Sigma
level.
Figure 7 | Comparison of traditional vs flexible manufacturing. (Hill and Jones) [4]
One area where German production is Best Practice today, is Mass Customization. This means:
delivering individual customized products, combined with the benefits in high volume production.
Figure 7 shows the difference between traditional manufacturing, where the increase in volume and