OPERATION MANAGEMENT PROBLEM

Operation Management Problem



Abstract

The paper describes and analyses the introduction of just-in-time (JIT) production at Proton Cars, Malaysia. The paper examines the means of introducing JIT and the present scope of JIT within the company. The relevance of some existing models of JIT to the Malaysian experience is assessed. The apparently transitory nature of JIT at Proton is investigated and found to be developed as a strategic approach. The strategy is to create an indigenous base of suppliers capable of supplying world markets. The methodology involved literature review, observation of the operations at the Proton plant, interviews and discussions with Proton staff at all levels and interviews with suppliers. Secondary data were collected.

Table of Contents

Abstract2

Introduction4

Background5

Industry and company5

Social history7

Methodology8

Theory10

Just-in-time10

Supply chain management12

Results and discussion13

Capacity development at Proton13

Production executive interview14

Vendor development programme executive interview15

Discussions with shopfloor workers18

Internal JIT at Proton19

JIT supply - external JIT practices at Proton21

The suppliers' views on JIT at Proton23

Proton's social policy in a Malaysian context26

Conclusions27

References34

Operation Management Problem

Introduction

This paper investigates the application and adaptability of just-in-time (JIT) in the largest Malaysian automobile manufacturing company (Proton). The main objective of this paper is to develop an understanding of a Malaysian version of JIT in its automobile industry and to examine the concept of JIT in a Malaysian manufacturing setting. This is especially interesting and important since Malaysia has not gone through the usual stages of a craft era (labour intensive, highly-skilled workers) followed by Fordism (mass production of single products, semi-skilled workers) and post-Fordism (mass customisation, multi-skilled workers) (see Wilson, 1992). Although, some might argue that they have actually gone through these stages but over a very short time, thus giving scope to manufacturing management for a variety of approaches (Womack et al., 1990). There are other ways of looking at the development of manufacturing and operations management (Monks, 1987; Sykes et al., 1997). For example, Monks (1987) suggests a framework based on US experiences with a Handicraft era (circa 1700-1800), Industrial Revolution (circa 1800-1890), Scientific Management era (1890-1940) and Operations Research and Computerised Systems era (1940-present). However, these ideas seem even less applicable to developments at Proton.

The secondary objectives of this paper are to:

Determine the amount of JIT activity in the company.

Look at the structure of the buyer-supplier relationships that support the JIT system.

Draw out the factors that support and hinder the successful implementation of JIT in the company.

Identify where the Malaysian version of JIT differs, if indeed it does, from the conventional Japanese form of JIT.

Background

Industry and company

The automobile industry in Malaysia began in 1962 when Ford Motor Company of Malaya was incorporated and began operation with 16 employees fitting wheels, doing body repair and paint touch-up work in a rented shop-house in Singapore. In 1963 the initial move for local production of automobiles in Malaysia began. It was realised by various government bodies and politicians at that time that automobile production might be a worthwhile industry in Malaysia. In September 1963, the Federal Government announced its intention to encourage the establishment of an automobile industry ...