JIT inventory

management in a
Textile
manufacturing
producing terry
towels around
100,000 meters
/year
Operation Management

Group members:
M.Shahzaib Subhani
Sher Alam
Mehboob-Ur-Rehman
Uzair Basharat
M.Faisal Khan
Presented To:
Sir Azhar Nisar

LETTER OF TRANSMITTAL
nd

Dated: 2 Dec, 2014.

COMMANDER (RTD) AZHAR NISAR
(Course Instructor)
Operations Production and Management
BBA 6A (Morning)
Subject: Report Submission
Dear Sir,
With reference to the course of Operations Production and Management, We hereby submit to
your esteemed honour our report on the topic:

JIT inventory management in a Textile manufacturing producing terry

towels around 100,000 meters /year
We hope that our efforts will not let down your expectations. Thanking you for your guidance.

Yours Sincerely:
M.Shahzaib Subhani
Sher Alam
Uzair Basharat
Mehboob ur Rehman
M.Faisal Khan
CLASS: BBA 6A
BAHRIA UNIVERSITY KARACHI CAMPUS
(MANAGEMENT SCIENCE DEPARTMENT)

PREFACE
Just-in-Time (JIT) inventory management is the process of ordering
and receiving inventory for production and customer sales only as
it is needed and not before. This means that the company does
not hold safety stock and operates with low inventory levels. This
strategy helps companies lower their inventory carrying costs.
Just-in-time inventory management is a cost-cutting inventory
management strategy though it can lead to stock outs. The goal
of JIT is to improve return on investment by reducing nonessential costs.
This report on JIT inventory management in a Textile
manufacturing producing terry towels around 100,000
meters /year has been prepared for our course Operations
Management. We have worked hard to gather all the available
information regarding a JIT in Textile manufacturing industry. The
report will focus to facilitate the readers in understanding the
essential requirements which are needed to be analyzed when
implementing JIT in textile manufacturing industry producing
towels.

ACKNOWLEDGEMENT
"ALL PRAISE TO ALLAH THE MOST BENEFICIENT THE MOST
MERCIFUL"

This Project report is being submitted in the kind supervision of Cdr. (R) Azhar
Nisar who has thoroughly gone through the work done and continually provided
inputs for improvements.
We would first and foremost like to thanks ALLAH ALMIGHTY who helped us
in successfully completing the project.

Contents
LETTER OF TRANSMITTAL............................................................................................ 1
PREFACE..................................................................................................................... 2
ACKNOWLEDGEMENT................................................................................................. 3
EXECUTIVE SUMMARY................................................................................................. 5
AIMS AND OBJECTIVES OF STUDY...............................................................................6
JUST IN TIME INVENTORY MANAGEMENT....................................................................7
DATA COLLECTION...................................................................................................... 7
SUMMARIZE PROJECT DETAIL..................................................................................... 8
ADVANTAGES OF JIT................................................................................................. 9
DISADVANTAGES OF JIT........................................................................................... 9
KEY ELEMENTS OF JIT & INVENTORY MODELS...........................................................10
PRODUCTION:........................................................................................................... 11
SIMPLIFICATION OR JUST ENOUGH RESOURCES........................................................14
CONSIDERATIONS..................................................................................................... 15
RECOMMENDATIONS................................................................................................. 15
REFERENCES............................................................................................................ 16

EXECUTIVE SUMMARY
This report of JIT inventory management in a Textile
manufacturing producing terry towels around 100,000 meters
/year is prepared to highlight the overall working and plannings when it comes
to implementing JIT.
This report is prepared to deliver insights about the how a
company is operating in terms of inventory and operations
and how JIT measures are adopted to ensure a continuous
and smooth production of 100,000 meters of terry towels in
a textile industry per year.
This report is focusing on multiple aspects and successful
implementation
of
JIT,
Quality
management
and
responsibility, group efforts and continuous production with
consistent quality reduced inventory turnover time etc.,
which are required to run a successful JIT in a textile industry
producing 100,000 meters of terry towel per year.

AIMS AND OBJECTIVES OF STUDY

To accomplish our course requirement of a report on
JIT inventory management in a Textile manufacturing producing terry
towels around 100,000 meters /year
To learn more comprehensive definition of JIT that can be
developed by considering the main elements that are
attributed to successful JIT systems. These elements can be
separated into two broad categories including attitude and
practice. While the elements of attitude can be adopted by
any organization, the elements of practice are mainly
applicable
to
companies
involved
in
repetitive
manufacturing. From an accounting viewpoint, these are
companies that would normally use the process cost
accumulation method.
A JIT system requires an attitude that places emphasis on the
following:
Cooperation with a value chain perspective,
Respect for people at all levels,
Quality at the source,
Simplification or just enough resources,
Continuous improvement and
A long term perspective.
A JIT system also incorporates the following practices:
Just-in-time purchasing,
Just-in-time production,
Just-in-time distribution,
Simplified accounting and
Process oriented performance measurements.
6

JUST IN TIME INVENTORY MANAGEMENT

Just-in-time (JIT) can be defined narrowly as a production or
inventory scheduling technique. JIT is more appropriately thought
of as a philosophy because, even though it includes a variety of
techniques, it is much more than a collection of management
practices. Although a precise, or operational definition of JIT has
not been developed, it basically involves the elimination of
waste and excess by acquiring resources and performing
activities only as they are needed by customers at the next
stage in the process.
For example,
Inventory buffers are viewed as an evil in that they hide
problems such as defective parts, production bottlenecks,
long machine set-ups and competitive behavior within the
company.

DATA COLLECTION
Primary Source: The information is taken from various
sources the main source was visit to Afroze Textile Industry
through observation of operations and functions including JIT
management and rest of was taken through miscellaneous
questions necessary for data collection for Primary source.
Secondary Source: Secondary data is mostly taken from
7

the internet.

SUMMARIZE PROJECT DETAIL

It is becoming extremely difficult for the organizations to catch up
with profitability in the wake of increasing global competition.
Keeping an eye on competitor's product, price, quality is very
important but the most important thing which should be kept in
mind is the strategies which are built to get the competitive edge,
it can be related to anything, either how to get the maximum
output through increasing the sales volume or increasing the
maximum profit by reducing cost or any other. Nowadays different
organizations are focusing on varying concepts which are helping
them to minimize the cost of product they make. Just in Time (JIT)
is one model which is used for minimizing the cost of the product
through various techniques and maximize the best possible
outcome.
JIT is a pull production system which is based on
manufacturing of material when it is required whereas Batch
system is a push system which is based on bulk manufacturing
and stocking. There are number of elements on which both the
systems can be compared such as,
In batch system functions are grouped together where as in JIT
teams are multifunctional.
Employees are independent in batch system where as they
are interdependent in JIT on previous function, there is no
access to inventory information in batch system where as
computer on a work station give the detail information
about the inventory in JIT.
Buffer stock is kept in successive operations where it is limited in
JIT, raw material inventory is delivered to stock room and placed
in assembly kits.
It also helps to minimize the storage cost and reduces the cost
of reprocessing of defected inventory. Various studies have also
9

shown that there is a significant relation between

implementation and financial growth from savings.

JIT

INDEPTH ANALYSIS OF OUR PROJECT

ADVANTAGES OF JIT
The use of just-in-time inventory has the following advantages:

There should be minimal amounts of inventory

obsolescence, since the high rate of inventory turnover keeps any
items from remaining in stock and becoming obsolete.

Since production runs are very short, it is easier to halt

production of one product type and switch to a different product
to meet changes in customer demand.

The very low inventory levels mean that inventory holding

costs (such as warehouse space) are minimized.

The company is investing far less cash in its inventory, since

less inventory is needed.

Less inventory can be damaged within the company, since it

is not held long enough for storage-related accidents to arise.
Also, having less inventory gives materials handlers more room to
maneuver, so they are less likely to run into any inventory and
cause damage.

Production mistakes can be spotted more quickly and

corrected, which results in fewer products being produced that
contain defects.

10

DISADVANTAGES OF JIT
Despite the magnitude of the preceding advantages, there are
also some disadvantages associated with just-in-time inventory,
which are:

A supplier that does not deliver goods to the company

exactly on time and in the correct amounts could seriously impact
the production process.

A natural disaster could interfere with the flow of goods to

the company from suppliers, which could halt production almost
at once.

An investment should be made in information technology to

link the computer systems of the company and its suppliers, so
that they can coordinate the delivery of parts and materials.

KEY ELEMENTS OF JIT & INVENTORY MODELS

1. Stabilize and level the Master Production Schedule
(MPS) with uniform plant load:
It creates a uniform load on all work centers
through Constant Daily Production to prevent changes in
the production plan for certain period of time and Mixed
Model Assembly produce roughly the same blend of
products each day using.
2. Reduce or eliminate setup times:
With better planning, process redesign, and production
design to eliminate setup times to single digit (less than 10
minutes).
3. Reduce manufacturing and purchase lot sizes:
Since more frequent deliveries will be requires, close
cooperation with suppliers is necessary to achieve
reduction in order lot size for purchased items.

11

4. Reduce production and delivery lead times:

Production lead times is reduced by moving work station
closer,
applying
group
technology
and
cellular
manufacturing concepts, reducing number of job waiting to
be processed, and improving the coordination and
cooperation between processes. Delivery lead time is
reduced through closer cooperation with suppliers.
5. Preventive maintenance:
To use machine and worker break time to maintain
equipment in order to stay away from mechanical
breakdown.
6. Flexible work force:
Worker is trained to be able to operate several machines,
such as to perform maintenance tasks or to perform quality
inspection.
7. Require supplier quality assurance and implement:
Since there are no shields of excess parts, errors leading to
defective items must be eliminated.

PRODUCTION:
While discussing about the production plan it is to be noted that
Production in
textile industry should be as follows; at full
capacity, maximum utilization of hours as to meet the high
demands keep the quality up to the standards by following the
current concepts of JIT systems, which are:
6 working days.
8 hours/day.
For 500+ workers factory 3 leaves/month should be allowed
only.
QC will be there at each dept. in order to check, control and
maintain quality standards which is described by customer.

12

 Strong coordination should be there in each and every

department in order to fulfill the demand of customer.
All the inventory should be stored under computerized
system along with the coordination of supplier also which
automatically indicates how much inventory is required and
when?
Apply and implement KAIZEN THEORY of continuous
improvement.

Following are the process phase thorough which the raw

materials are processed and converted into finished goods;

FLOW CHART

13

Marketing Dept.
Planning
Purchase

Purchase order from Procurement Dept.

Purchase of Yarn

Spinning

Warping

Weaving

Sizing

Grey form of Towel

14

Quality Assurance

Bleaching

Dyeing

Cutting
Stitching
Packaging

15

SIMPLIFICATION OR JUST ENOUGH

RESOURCES
A goal of JIT systems is to achieve zero work in process
inventory buffers so that products flow continuously through
the system. JIT also includes the goal of zero ending finished
goods inventory. This reflects the idea that JIT is a demand pull
system rather than a speculative push system. Customer orders
drive production. The process starts with the final consumers who
place demands on the sales force, who place demands on the
production facilities, who in turn place demands on upstream
activities throughout the system. A JIT system also emphasizes
simplification and zero excess (waste) in all areas of business.
The objective is for the company to acquire just enough
resources including vendors, human resources, and capacity.
This is a very different concept from the idea underlying
traditional systems where excess resources are planned just-incase (JIC) they are needed. The JIT view is that excess of any
kind hides problems such as low quality raw materials and
unreliable vendors, employees and equipment. Remove the
excess and the problems become visible.

16

CONSIDERATIONS
JIT may be a good way to introduce continuous improvement or
quality management, but it is very difficult to implement as a
stand-alone process. Managers in charge of ordering or purchasing
may need to familiarize themselves with alternative shipping
methods. This may even require coordinating with other
companies operating within the area, as in an industrial park.
Personnel managers need to communicate with staff, stressing the
importance of JIT to providing quality products and services
and reducing costs, as well as convincing staff of the benefits in
rounding out skill sets by taking on different tasks.
However, a carefully planned and systematically executed JIT
system can eliminate waste and encourage higher-quality
output.

RECOMMENDATIONS
Almost every developing nation has textile manufacturing which
is among the first industries to be established. Pakistan is
consider as one of the main country in the world who fulfill the
demand of various countries including US, EU, African and Gulf
countries, in order to become well known exporter of textile
manufacturing goods in all over the world our textile industry
should adopt and implement the all current JIT systems which we
have mentioned above; it will minimize the waste and carrying
cost also which will ultimately leads towards more profit
maximizations rather than cost reductions.

17

REFERENCES
Allen, Donald S, 1995, Changes in Inventory Management
and the Business Cycle,economist at the Federal Reserve
Bank of St. Louis.Allen, Donald S, 1997, Vol.1, 51-59.
Becker, Dan M, Stanley,Stephen, 1992, Evidence of Improved
Inventory Control,Economic Review. January/February.
Chiu,Lee-in Chen, 2007, The Policy, Institution And Market
Factors In The Development Of Taiwans Textile/Garment
Industry, Chung-Hua Institution for Economic Research75
Chang-Hsing Street, Taipei, Taiwan 106, Republic of China,
Working Paper SeriesNo.2007-2.
Devaraja, Dr.T.S, 2011, Indian Textile and Garment Industry,
Department of Commerce,University of Mysore, Hassan,
India.
Islam,Md.Mazedul, Khan,Adnan Maroof, Islam,Md.Monirul,
2013, Textile Industries in Bangladesh and Challenges of
Growth, Department of Textile Engineering, Daffodil
International University, Bangladesh, Research Journal of
Engineering Sciences, Vol.2(2), 31-37.
Lancioni, Richard, A & Howard Keith, 1978, Inventory
Management Techniques, International Journal Of Physical
Distribution & Logistics Management, Vol 8, ISS:8, pp.
388,428.
Mwansele,HA, Sichona,FJ, Akarro,RRJ, Determination of
Inventory Control Policies at Urafiki Textile Mills Co Ltd ,Dares-Salaam, Tanzania, Business and Economics
Journal,Volume 2011: BEJ-23.
Ondiek,Gerald Ochieng, 2012, Assessment of Materials
Management in Kenyan Manufacturing Firms, University of
Nairobi, Odhiambo Odera, Masinde Muliro
18