Production Optimization at SC. Chimica S.A. Orastie

Abstract

The main function of the industrial unity is represented by the production of material goods that are obtained through the process of industrial production. This research was intended to interpret the positive results used after introducing the Kanban organization method of the production flows consisting of releasing the production of a work unit situated upstream to the production request of the work place situated downstream, using for this a simple visual means. [PUBLICATION ABSTRACT]

Headnote

Abstract

The main function of the industrial unity is represented by the production of material goods that are obtained through the process of industrial production. This research was intended to interpret the positive results used after introducing the Kanban organization method of the production flows consisting of releasing the production of a work unit situated upstream to the production request of the work place situated downstream, using for this a simple visual means.

Keywords: stock, optimization, Kanban, efficiency, budget

JEL Classification: L11

Introduction

The objective of the concepts and the method specific to the production management is the improvement of the production operations, materialized in improving the work productivity, the product quality and the economic efficiency.

The production process in an enterprise and its organization are subject to a series of factors, such as: the type of the used raw material, the characteristic of the manufactured finished product, the type of the used technological process, the volume of the manufactured production, the degree of concentration, combination, specialization and cooperation of the production.

1. Presentation of the society

The incorporation of the chemicals enterprise began in June 1937 under the name of "STATIA DE INCERCARI ASTRA". Since its foundation and until the present time it had several names, having been called S.C CHIMICA S.A ORASTIE since 1992.

The society has had private majority capital since 1995. It is located on the national road DN7, at 365 kilometers from Bucharest and it has access to the railway, at 180 km from the Timisoara airport, at 90 km from the Sibiu airport, at 620 km from the Constanta harbor.

The activity object of the company is the production and trade of products manufactured of plastics and foams. The active presence of the company on the plastics market has led to gaining a rather important market share compared to the other companies operating in this domain. The company produces a large variety of plastic products of different dimensions and colors. The main groups of products are put into two large categories: vehicle items; fast moving items: crates, barrels, tubs, product pieces, tables, chairs.

The organizational structure, as reflected by the flow chart, is pyramid-shaped. In the top of the pyramid there is the Company Shareholders' General Assembly and the General Director, and on its ground there are the production workshops.

The activity is developed in five production units.

The General Director has authority over the following departments:

The Technical-Quality Department; The Economic Department; the Commercial Department; The Legal Department; The Department of internal financial audit; The Department of personnel and salaries; The work health and safety office; The Civil Firefighters Brigade; The General Security Brigade.

The production operation has to provide the production of the goods, the execution of works or services in due time, in the requested quantaties, at a well-defined production cost combined with a certain quality, while optimizing the resourses and maintaining the enterprise alive, in full development and adapted to the competition.

1.2. Management strategies

A very important way to improve the production and conception structure is to systematize the enterprise by splitting the enterprise territory into regions and grouping the production units of the enterprise into blocks and by using the existing surface rationally.

Among the markers that are directly influend by a rational prodcution and conception structure the following are worth mentioning:

1. The volume, the content and the direction of the internal transports, salary funds

2. allocated to the personnel working in the internal transport departments and the

3. volume of the costs with the internal transport;

4. The number, the type, the dimension and the location of the enterprise

5. warehouses, the personnel number working in warehouses and the

6. correspondant salary fund;

7. The personnel number in the adminsitrative segment and the correspondant

8. salary fund;

9. The medium duration of the production cycle per enterprise, the volume of

10.unfinished production and theregulation regarding the moving means for

11.unfinished production;

12.The continuity degree of the technological flow, of the material flow and of the

13.personnel flow;

14.The usage degree of the enterprise territory.

Improvements brought in time in the production and conception structure has to reflect improvements of these markers, in the sense of reducing the volume of works, the theoretical number and the salary funds corresponding to transport activities, warehouse activities, administrative activities, of reducing the duration of the production cycle and of the regulation regarding the moving means, of the dimension of the continuity degree of flaws and the reduction of their length, a s well as of the increased usage degree of the surfaces owned by the enterprise

2. Economic efficiency by implementing the Kanban method

The Kanban method of organizing the production flaws consists of releasing the production of a work unit situated upstream to the production request of the work place situated downstream, using for this a simple visual means.

Using this method involves setting up an information flaw from the direction downstream to upstream and, as response, a return flaw of raw materials, amterials, pieces, etc, downstream to upstream.

According to the Kanban method, the organization system isbased on two sheets when the work posts are away or when the volume of pieces needs an intermediary storage or, normally, one sheet. Using this method also involves putting similar pieces in identical recepients, of the right dimension, in order to be easily manipulated, manually as much as possible and a production organization on production lines per each manufactured object (product).

Basically, applying the Kanban method needs respecting the following rules:

- the work post (place) situated downstream informs the work post situated upstream that they have started processing the first piece in the recipient in stand-by;

- when the signal and the sheet mentioning the pieces and the necessary quantities are received, the work post situated upstream executes the pieces and the requested quantities;

- the work post situated downstream is supplied with a new recipient in due time to guarantee continuity of the work process;

- the work posts the work post situated upstream must supply only high quality pieces or products;

- the stabilization and the correct adaptation of the production cycles.

Kanban is a supplying method and a method of releasing the manufacturing process agreed between the supplier who manufactures a product and their client or who consumes the respective product.

The principle is based on renewal of the wrapping used by the client by means of a physical and visual informing system, materialized through a Kanban label. The word "Kanban" comes from Japanese and it means label in, this term being sometimes used to define the method, but also to define the labels.

before: Supplier

- The order is not sure, so the manufacturing process is only forcasted.

- It is possible that no stock is available for the requested reference.

Client: In order to repair the supplier's lack of reliability, the client applies a security measure by creating stocks.

after: The Kanban system syncronizes the fabrication and the consume

To produce is not a target of its own, it has as primary aim the clients' satisfaction, the cost reduction by controlling and following stocks.

First of all, Kanban allows a better control and tracking of the stocks, calculating the number of labels considering the existing situation, without making dramatic reductions. It is about "calming the flaw." Starting up the system is based on balance and dimension of the stocks according tp the client's consume.

Kanban will be the realizing element and it will be accompanied by improving actions on flaws during the following stage. Reducing the stocks will have as consequence winning surfaces and packages.

Human context:

. More important than the fabrication program (how much i manufacture) is the prioritization (in what order), performed by a specialist, with all disadvantages generated by a possible absence.

. In a normal production module the workers manage the work tasks by themselves because they understand and are familiar with the ongoing. In industry a too large specialization led to separating responsibilities regarding the production mode by manufacturers. Kanban allows vizualizing and sharing the work tasks in the workshop among the whole personnel.

Kanban method is based on a partnership client/supplier managed by means of a contract, a prior agreement.

The client agrees to inform the supplier about their needs only according to the consume. The supplier is forbidden to manufacture or deliver goods to the client as long as they have not received the Kanban labels, mentioning the number of pieces to be resupplied for an item. The contract is fulfilled by circulating the Kanban labels.

Operating systems:

* The client is supplied based on a stock:

* According to their needs and at the frequency they want

* Without any constraint of order or priority

* Each full package is identified with the help of a Kanban label and the client must inform the supplier by sending the label of each consumed package.

* The supplier puts the labels on a table that represents the book or the order by quantity and priority.

* The supplier has the duty to renew the stocks without sending packages in excess.

* If packages are not consumed, labels are not sent to the table and the supplier stops its activity.

The first Kanban type corresponds to the following definition: "I manufacture and deliver the ordered lot to my client"

2.1. Kanban loop

Kanban loop has its ends bordered by storage points. Downstream there is the stock of finished products, upstream there is the stock of raw pieces, from where the workshop managed by the Kanban system takes its necessary.

The second Kanban type corresponds to the following definition: "I deliver or I supply the already manufactured stock"

For the client, consuming a package generates a supplying Kanban to the supplier (through the Kanban label). Receiving this Kanban label, the supplier takes out a package from the stock corresponding to the requested reference. Calculating the Kanban number (the label)

NK = (CMZ x TR) + S + series dimension UC

. CMZ: Consum Mediu Zilnic (Averahe daily consume).

. TR: Timp de Reaprovizionare (Resupplying time).

. S: Safety stock serving to cover the variations related to consume and resupplying time.

. Series dimension: number of pieces manufactured by the supplier after release.

. UC: number of pieces from the KB package.

Only a detailed analysis of the flaw allows the validation of all parameters and a correct sizing of the Kanban loops.

The support of the label shall have a format and a type adapted to the necessities on the field. The colors on the label and its support will facilitate the visual management.

2.2. Table of production ordering

This table will have at least one column for each reference that must be managed. In some cases it is better to create a number of columns equal with the number of reference couples per client. KANBAN labels must be gradually arranged on the TPO, in the order coming from the client. First, the green area of the table will be filled in, followed by the white area, the last one being the red area.

The green area corresponds to the minimum releasing size of the series, the operators waiting for this area to be completely filled in before starting to manufacture another lot. The red area represents the emergency area: the delivery loop starts to be interrupted, so this is the moment to release the production urgently. The white area, if there is one, is a flexible area; when labels reach this area, the workshop prepares to release another series and also the necessary machines.

The two-stroke visualization is realized by means of two tables, a table of orders accumulation and a table of orders planning. This visualization allows: establishing the dimension of the series; a more simple ordering (planning) of priorities.

The accumulation table is used to visualize the pieces that are being manufactured at that moment. The total number of circulating labels for each reference can be displayed at the base of each column: the number of packages that are being manufactured is equal to the total number of circulating labels, minus those displayed on the two tables.

The circular ordering table consists of a loop designed for receiving triangular labels coming from the accumulation table. The arranging sense of the lots (manufacturing trains) is indicated by an arrow. Each triangular labels support is associated to a bridge which allows receiving Kanban labels corresponding to the series.

2.2. Advantages of the Kanban

The methodology facilitates the flaw fluidity;- Physical utility, it encourages the operators' adaption;- Utility regarding the visual communication;- Allows solutions for the release mode of the production;- Transparency and control over stocks;- This method is a progress instrument.

Clients' satisfaction at every stage; cost reduction; stock reduction. The global reduction of costs will be realized naturally, by simple evolution which will use Kanban: reducing the dimension of the series, using a method that reduces the useless time spent with manufacturing changes. Therefore, all Kanban loops different client/supplier workshops are connected through storage points.

Conclusions

Following the implementation of the Kanban method at the production department the number of unfit pieces decreased; the stock of finished products in the stock was reduced. The method brings flexibility to production. The FIFO (FIRST IN FIRST OUT) principle can be more easily respected. It also leads to production increase since problems that may occur with the machine can be identified faster. Total costs are also reduced.

Recommendations for the future time can include: extinding the application of the Kanban method in all production units of S.C CHIMICA S.A; correlation of the Kanban method with other continuous improvement methods, such as 5S, SMED, Standardization of the Work Post, the correct calculation of the Kanban loop anytime a volume change is observed in the client's request. All this shall lead to the optimization of the production process.

References

References

Badea, F. (2000) Management of Production: "ALL" Publishing House

Badea, M. (2011) Management of Production: Publishing House of the University of Pitesti